A Tale of Two Chip Stocks: Intel and Texas Instruments Kick Off Semiconductor Revenue – Intel (INTC), Texas Instruments Inc. (TXN)


intel company (NASDAQ:INTC) and Texas Instruments Incorporated (NASDAQ:TXN) release quarterly results this week, marking the start of the big tech earnings season.

Texas Instruments is due to release its report Tuesday after the close, and Intel will release its quarterly report the day after the close.

Here are Rosenblatt Securities’ expectations for the first two big tech earnings to hit the wire.

Intel will report a slight delay although challenges remain: Intel expected to report slight beat, driven by strong PC demand and recovery in enterprise and government, analyst Hans Mosesmann said in a note. Non-GAAP sales and EPS are expected to exceed the consensus estimate of $18.4 billion and 91 cents, respectively.

During the conference call, the analyst expects the CEO Pat Gelsinger to discuss PC demand for 2022, industry-wide supply constraints, and an update on the company’s semiconductor fabs, among other topics .

Intel is expected to guide September quarter revenue and EPS slightly above the consensus estimate of $17.6 billion and 85 cents, respectively, the analyst said.

The outlook for 2022 is likely to be flat given various data center dynamics that include Sapphire Rapid delays and the cancellation of the Xe HP Scalable GPU, he added.

“We continue to view structural challenges, increased execution risk, an overly aggressive sales growth target and years of 50% low gross margins as challenges,” Mosesmann said.

Related Link: 8 Stock Picks to Play 2022’s Emerging Trends Shaping the Semiconductor Industry

Texas Instruments is settling in well in 2022: Rosenblatt is bracing for Texas Instrument sales to top the consensus estimate for a sequential single-digit decline and EPS to top the consensus of $1.94, Mosesmann said.

An industry rebound and continued momentum in autos are expected, and the company will likely spend the next several quarters trying to keep up with demand, the analyst said.

The analyst also looks forward to any comments regarding hotspot lead times and fabulous investments/plans on increasing capacity. The company will likely guide March quarter revenue above the consensus estimate of single-digit sequential growth and EPS at $1.89, the analyst said.

Large capacity additions are expected to come online from Texas Instruments in 2022 and these additions will drive significant analog market share gains for years to come as competitors lack the scale to build 300 capacity. mm and/or tightness in the foundry and structural shortages of 200 mm delay. fabs, says Mosesmann.

That tailwind, coupled with a continued focus on industrials and autos and strong excess cash yield, set the business up well in 2022, he added.

Mosesmann has a sell rating on Intel and a price target of $40. The analyst rates Texas Instruments as a buy with a price target of $230.

Illustration by Shafin Al Asad Protic from Pixabay

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