Big cap tech bellwether and chipmaker extraordinaire Intel Corp. (INTC) reported better than expected profits and revenues Thursday after the bell. The Santa-Clara based company reported net income of $2.3 billion, or $0.40 / share, for the quarter ended December 26th on revenues of $10.6 billion. These numbers dwarfed those of the same Q last year, which saw the company amass net income of $234 million (including a $1.1 billion write-down) on revenues of $8.2 billion. The street had been expecting revenues to come in at 10.2 billion.
The report, founded on better pricing and demand, demonstrated Intel’s renewed capability to produce top-line growth. This will likely breathe some new life into hopes on the street for a continuance of last year’s tech rally and perhaps into the rest of the market as well.
After Alcoa’s (AA) earnings shortfall earlier this week, market sentiment seemed to be taking a turn for the worse. A beat by a company the likes of Intel should be exactly what the market needs to turn things around. Reflecting this potential, AMD has gained 1.6% after hours and MSFT has followed suit, gaining 1%.
Shares of Intel popped $0.23, or 1.07%, after hours following a 2.39% rally during regular trading on very high volume leading into the report. Shares punched through a trading range dating back mid-October earlier this month, and hit a fresh 52-week high today. INTC is beyond what would be considered a technically sound buy point (breakout of pattern + $0.10), but may have room to run up to the $24 – range, where it would touch it’s 2008 highs. That would be a gain of nearly 12%, and the heavy volume suggests significant institutional backing behind today’s move, so you very well may get it.
Overall, this report is likely to spark a return of the bullish mindset on the street, at least until another big company reports a major shortfall. Look for a big move from the QQQQ’s tomorrow.
Disclosure: No positions in INTC, AMD, or MSFT.
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