An unexpected increase in notebook builds could help Intel Corp.’s performance when it releases its earnings next week. Analysts caution against making too much of that, though.
This is because, in anticipation of the Trump administration’s planned import duties, Intel (INTC) probably profited in the first quarter from frantic purchases of its PC CPUs. According to Chris Rolland, an analyst at Susquehanna Research, the issue with that is that it might increase risk for the second quarter.
According to him, Intel’s first-quarter earnings will be in line, with PC performance being “offset by continued weakness in server.”
It’s true that the general majority still predicts a drop in sales for Intel’s PC business, which is its client division. Revenue from client computing is expected to drop 9% to $6.9 billion, while revenue from data centers is expected to drop 3% to $2.9 billion.
However, Rolland used to anticipate flat performance from PCs, but now he expects notebook builds to increase 1.5% year.
However, he cautioned that the company’s projections might turn out to be less strong than anticipated.
Overall PC shipments increased by 4.9% in the first quarter, according to third-party data released earlier this month by market research firm IDC.
IDC analyst Jean Philippe Bouchard stated in a release that “the market is clearly showing some level of pull-in in the first quarter this year as both vendors and end users brace for the impact of U.S. tariffs.” “In a first quarter still relatively untouched by tariffs, the entire ecosystem attempted to accelerate the pace of deliveries to avoid the first round of U.S. tariffs and expected volatility for the remainder of the year.”
According to Melius Research analyst Ben Reitzes, who examined the IDC statistics on PC and smartphone shipments, this appears to be the reverse of what transpired during the pandemic, when there were shortages of technological equipment. What’s happening now is “a sudden glut.”
Reitzes went on to say, “I wish my covered companies the best of luck with the upcoming guidance,” adding that it’s difficult to determine “real demand” at this point because Trump has postponed tariffs for still another three months.
On a bad day for the tech industry, Intel’s stock dropped 3%, and the Nasdaq Composite COMP also saw a 3% decline.
