Intel Stock Jumped Today -- What's Next After Its Q1 Results?

Source The Motley Fool

Intel (NASDAQ: INTC) stock posted substantial gains in Thursday's trading. The company's share price ended the day's trading with a 4.4% gain. Meanwhile, the S&P 500 index jumped 2% in the session, and the Nasdaq Composite index rose 2.7%.

Intel's valuation rose again in Thursday's trading in conjunction with hopes for resolutions on the trade war front, spurring bullish momentum for the broader market. But the guidance picture provided by the company with its first-quarter report this afternoon suggests that today's gains could be poised to evaporate tomorrow.

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Intel stock rose today on hopes trade war de-escalation could be in sight

The market saw another day of big gains Thursday as investors bought back into stocks on hopes that some trade war tensions could soon be alleviated. Reports suggesting that the Trump administration intends to get a deal done with China and bring tariffs lower helped drive bullish market momentum, and news indicating the U.S. could also be nearing a trade deal with India also helped send valuations higher.

But Intel's Q1 report and guidance signals valuation pressures in the near term

Intel reported its Q1 results after the market closed today, and actually posted sales and earnings performance for the period that came in significantly better than Wall Street's targets. The business posted earnings per share (EPS) of $0.13 on sales of $12.67 billion, coming in far ahead of the average analyst estimate's call for per-share earnings of $0.01 on sales of $12.3 billion.

On the other hand, Intel guided for a substantial sequential performance decline in the quarter. Management's midpoint guidance calls for Q2 sales to come in at just $11.8 billion, suggesting a decline of roughly 7% year over year. Meanwhile, the business guided for a breakeven result in the current quarterly period. The average Wall Street target had called for a profit of $0.06 per share. The stock is down roughly 4.6% in after-hours trading as of this writing. While the Q1 earnings beat surpassed the Q2 guidance miss, investors may be worried that tariff and trade war dynamics may have pulled demand forward last quarter -- and that future performance is poised to be weaker as a result.

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Keith Noonan has positions in Intel. The Motley Fool has positions in and recommends Intel. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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