The recent recovery in the semiconductor industry appears almost defiant. After a noticeable setback at the end of last year, chip stocks are experiencing a renaissance that is holding up even in the face of geopolitical tensions. Neither the uncertainties surrounding the conflict in Iran nor economic concerns have so far been able to slow the recent upward trend. Investors are once again increasingly focusing on the sector - driven by structural growth themes such as artificial intelligence. In this environment, Intel is also moving back into the spotlight. For a long time, the chip giant, founded in 1968, struggled with operational issues and increasing competitive pressure. However, the latest data points to stabilization. With its results for the first quarter, Intel delivered a positive surprise. Both revenue and margin development exceeded analysts’ forecasts. In particular, the business with data center and AI chips proved more resilient than feared. This shows that Intel is increasingly benefiting from AI-driven demand. Cost management also stood out positively: the company was able to control its expenses in a disciplined manner, thereby supporting profitability. In numbers, the results are as follows: revenue increased by 7% year-on-year to USD 13.6 billion, while analysts had expected only USD 12.4 billion on average. Ebitda margin improved significantly to 41%. Earnings per share reached USD 0.29 between January and March, also well above the average estimate of USD 0.01.
Another highlight at the start of the year was the development in the traditional PC business. After suffering from weak demand in recent quarters, this segment now appears to be bottoming out. These early signs of recovery provide reason for optimism that Intel can achieve more stable revenues here again. In the corresponding segment, the Client Computing Group (CCG), revenue amounted to USD 7.7 billion, a slight increase of USD 100 million compared to the previous year. Overall, the quarterly figures paint the picture of a company that is realigning its operations and making initial progress. Management’s outlook underscores this cautious confidence. Intel expects a moderate improvement in business performance in the coming quarters, driven by rising demand in the data center segment and a gradual recovery in the PC market. At the same time, the company remains cautious regarding macroeconomic conditions. Uncertainties in the global economy as well as geopolitical risks could continue to cause volatility. For the current quarter, Intel anticipates another increase in revenue to between USD 13.8 and 14.8 billion and earnings per share of 8 cents. The market had expected revenues of only USD 13.08 billion.
A key factor behind the recent increase in investor confidence is also the role of the US government. As part of industrial policy initiatives to strengthen domestic semiconductor production, Washington has supported Intel. This participation or funding was well received by the market and was accompanied by a significant rise in the company’s share price. Market participants interpret this as a signal that Intel plays a central role in the United States’ strategic technology policy. Despite the improved outlook, analysts remain cautious in their assessment. The consensus currently rates the stock as “Neutral,” and the average price target of USD 75.42 is even about one-tenth below the current share price. While the progress is acknowledged, doubts remain as to whether Intel can regain its former strength in the long term amid intense competition. For investors, the stock therefore remains a waiting game - with opportunities, but also risks.
The neutral rating fits well with the payoff profile of barrier reverse convertibles. Accordingly, Leonteq has launched two new BRCs on Intel with attractive terms. The CHF-denominated variant offers a coupon of 10.50% p.a., while the USD product yields as much as 14.50% p.a. In addition, both products feature a solid risk buffer with a european barrier of 50%, protecting the nominal value over the 15-month term. Particularly positive is the fact that these are European barriers, providing additional protection. The barrier is only active at final fixing, allowing the underlying asset unlimited room to move during the product’s lifetime.
Those willing to take on higher risks can also invest in leveraged products on Intel’s stock. Leonteq offers a broad selection, including numerous mini-futures as well as classic warrants and knock-out products. These instruments make it possible to participate disproportionately in price movements. Investors can flexibly position themselves for both rising prices (long) and falling prices (short).
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