Citi Note Hints Intel Q2 Results Might Lead to a Short Squeeze
A fresh note from the investment firm Citi warns that those betting against Intel Corporation might see losses after the firm shows its next second-quarter results. While keeping a Neutral view on the stock, Citi sees a chance for a good surprise in earnings per share (EPS) that might shock the market.
Key Reasons for Possible Gains
Citi analyst Christopher Danely noted two main points that could lift Intel's results in the second quarter.
- Strong Cost Cuts
With CEO Lip-Bu Tan's lead, Intel is working on a big change. This includes strong cost cuts like cutting up to 2,500 jobs in Oregon, selling its robotics part, and stopping work on new tech like glass substrates. These moves should cut both capital and daily costs, boosting profits.
- Strong PC Market
The second point is a possible gain in the PC market. The note says this part makes up 60% of Intel's money, and a good show here could help a lot. Even with losing market share to AMD, Intel stays the top PC chip maker in the world.
More Bets Against Intel
Citi’s warning comes as more short sellers bet against Intel. NASDAQ data shows short sold Intel shares rose to 128 million by June 30th, up from 94.9 million before. This comes as Intel took a financial hit and faced big issues in making and competition.
Citi’s Formal View and What The Market Might Do
Even with the chance for a good surprise, Citi kept its Neutral rating for Intel's stock with a $24 price aim. The note points out that Intel is one of the most shorted stocks they know of, and a Q2 surprise might make these short sellers buy back their shares fast, causing a "squeeze."
Investors are set to watch Intel's next report closely, looking at the PC market and also how Intel's big business and server sections do against tough rivals.