Why Intel Corporation Hit a 10-Year High
Yesterday evening, chip-giant Intel gave investors a pleasant surprise. Intel boosted its revenue outlook for the second quarter, effectively pre-announcing a beat relative to Street expectations. Revenue should come in around $13.7 billion, give or take $300 million. That's up from the prior guidance range of $13 billion, give or take $500 million. That $700 million boost in the mid-point is well above the $13.1 billion consensus estimate.
Gross margin should also come in better than expected, and Intel is now forecasting revenue growth this year. The company attributed the strength to business PCs, which are seeing healthy demand. That also has implications for Microsoft , as the current enterprise upgrade cycle is directly related to Windows XP's end of support in April.
This upgrade cycle, while boosting results now, could still prove short term in nature. Upgrade cycles of this magnitude don't come around very often. Additionally, Intel's rally puts its free cash flow valuation multiples at a premium relative to peers, which implies that investors are expecting sustained growth.
In this segment of Tech Teardown, Erin Kennedy discusses Intel's rally with Evan Niu, CFA.
Are you ready for this $14.4 trillion revolution?
Have you ever dreamed of traveling back in time, and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play," and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 TRILLION industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.
The article Why Intel Corporation Hit a 10-Year High originally appeared on Fool.com.Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. Evan Niu, CFA has the following options: short January 2015 $280 puts on Amazon.com and long January 2015 $250 puts on Amazon.com. The Motley Fool recommends Amazon.com, Apple, and Intel. The Motley Fool owns shares of Amazon.com, Apple, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.