FBR says Intel’s (INTC) Q2 will be fine but that guidance will be weak on macroeconomic problems. The firm also mostly blames NVIDIA’s shocking miss on NVIDIA, not on the market weakness that NVIDIA cited:
2Q preview—No major surprises likely:
Our checks suggest that Intel’s 2Q revenues tracked in the upper half of its revenue guidance range of $9.0 billion to $9.6 billion due to continued emerging market unit demand, new ‘netbook’ demand (and initial channel fill), and easy 1Q comparisons.
3Q guidance preview—revenue guidance could be a touch worse than expected:
For 3Q, we think revenues can grow by 4% to 6% QOQ, driving possible revenue guidance of
$9.6 billion to $10.2 billion, a slight miss versus the Street estimate of $10.1 billion…With renewed macro concerns and the possibility that some supply chain production was pulled into 2Q due to greater use of ocean freight, Intel’s guidance could slightly disappoint.
Is Nvidia a canary in the PC coal mine? Likely not:
Nvidia’s recent 2Q miss has clearly spooked investors about the health of the PC market. While PC checks have been a bit softer over the past month, we believe most of Nvidia’s problems were company-specific and were not likely representative of the overall PC space.
FBR maintains MARKET PEFORM on Intel (INTC), target price $27.