synopsis

Intel, once a semiconductor frontrunner, has fallen far behind its peers due to a series of product missteps and execution issues.

Intel Corp.’s (INTC) Stocktwits feed gained steam on Wednesday after a report said the struggling chipmaker is eyeing deep job cuts even as it prepared to release its first-quarter results.

Retail sentiment among Intel stock watchers turned to 'neutral' (46/100) late Tuesday from 'bearish' a day ago, and message volume improved to 'normal' levels.

INTC sentiment and message volume as of 2:25 a.m. ET, April 23 | source: Stocktwits

Bloomberg, citing people with knowledge of the matter, reported that the company is planning to announce this week a 20% workforce reduction in a bid to streamline management and rebuild an engineering-driven team.

The company recently saw a leadership transition, as Lip-Bu Tan became CEO in mid-March.

On the second-quarter earnings call held in August 2024, former CEO Pat Gelsinger said that to drive meaningful spending reduction, the company targeted a 15% headcount reduction by the end of 2025, according to the Koyfin transcript. He noted that much of the cuts would be completed by the end of 2024.

Intel aimed to reduce its 2025 operating expenditure by more than 20% to $17.5 billion through these actions.

Data in the chipmaker's 10-K report filed in late January showed that it employed 108,900 people by the end of 2024.

Last week, Intel announced a deal to sell a 51% stake in the Altera unit to Silver Lake in an $8.75 billion deal. 

Intel, once a semiconductor frontrunner, has fallen way behind its peers due to a series of product missteps and execution issues. Unlike Nvidia (NVDA) and Advanced Micro Devices (AMD), which outsource chip manufacturing, Intel does things in-house, making it less reactive to the evolving dynamics.

It has also lagged in the artificial intelligence (AI) race, as Nvidia outshines others and holds a dominant position in the AI chip market due to its first-mover advantage.

More details could be forthcoming as Intel reports its first-quarter results on Thursday after the market closes.

According to a consensus compiled by Finchat, Intel will report break-even earnings on revenue of $12.31 billion versus earnings per share (EPS) of $0.18 and $8.72 billion a year ago.

Bernstein analysts on Tuesday reduced their intel stock price target to $21 from $25 and maintained a 'Market Perform' rating, TheFly reported. The analysts said they adjusted their estimates, factoring in some client business upside in the first half due to likely pull-forward/channel fill stemming from the tariff dynamics.

A  bullish watcher said the 20% workforce reduction should set off a 20% rally in Intel stock. They also noted that big investors have been loading up the stock. 

Another user, however, said they would not hold it through the earnings print in such a volatile market.

Intel stock ended Tuesday's session up 3.56% at $19.51 and gained 2% in the after-hours session following the job cut speculation.

The stock is down 2.7% this year. The Koyfin-compiled consensus price target for Intel stock is $22.20, implying nearly a 14% upside potential.

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