Intel's Q2 revenue rose 25% year over year, a massive acceleration from Q1's 7% growth. Margins jumped to about 42% and AI segment grew 59%, while foundry revenue rose 31%. Bulls are highlighting a new catalyst.
Wedbush analyst Matt Bryson said Intel's advanced packaging technology, EMIB, could put the company in a position to win TPU orders from Google. If proven true, it would be the first real signal that an outside chip designer trusts Intel's manufacturing enough to bet its own products on it. The bear case is getting stronger.
Bears point out that server revenue growth is related to price, not volumes. Average selling prices rose 48% while unit volumes grew only about 9%. Client computing segment prices were up 27% and volumes were down 8%.
A major chunk of Foundry revenue in the most recent quarter was due to Intel manufacturing chips for itself. External customer revenue came in at only about $293 million. The segment lost approximately $2.1 billion in operating income for the quarter.
Intel has a non-GAAP trailing P/E of 88.70 against a sector median of 25.65, a 246% premium. Forward P/E is 63.91 versus 23.77, a 169% premium. EV/Sales runs 8.64 forward against 3.64 for the sector, a 138% premium.
However, forward non-GAAP P/E of 63.91 sits only about 6% above Intel's own five-year average of 60.13. Opendoor Technologies (NASDAQ:OPEN) buys homes directly from sellers, renovates them, and resells them. The stock is down 42% so far this year amid a slowdown in the housing market.
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