Intel Earnings Today Could Shake Up Stubbornly Rangebound Price

Intel (INTC) will report earnings after today’s close, once again bringing semiconductor stocks into focus for traders as the murky tariff and trade war situation remains fraught with the potential for major unexpected disruptions in this critically important sector.

Analysts are looking for earnings per share to come in at $0.01 against the -$0.46 loss one year ago (+102.1%). Meanwhile, revenue estimates are for $13.11B versus $13.28B last year (-1.3%). The options market shows a potential expected move of approximately +/-3.47 (9.5%) for Friday’s Oct. 24 expiration.

Intel, the once-dominant computer chip maker, has been the laggard among its peer companies for years as it faces fierce competition from the behemoth that is Nvidia (NVDA), as well as other chipmakers like Broadcom (AVGO) and Qualcomm (QCOM).

But its true archrival in many ways is the upstart AMD (AMD), as both companies specialize in similar types of chips. Intel’s share of the market has been eroded away by its younger competitor, as consumers gravitated toward AMD’s powerful but more budget-friendly products.

However, fortunes seem to be rapidly shifting upward for the beleaguered former king of the chipmakers, as shares surged after news broke that Nvidia would make a $5 billion investment in Intel to co-develop data center chips for a one-day 22% rally on Sept. 18. The move came shortly after Softbank’s $2 billion investment in August as well as the U.S. government’s move to take about a 10% stake in the company.

Shares have been rangebound since early October, with the low close coming in at 35.63 and the general ceiling near 38.50. Momentum according to the RSI study shows bearish divergence, with price making higher closes as momentum trends downward.

This situation is not uncommon heading into earnings, but now traders likely will be eyeing these inflection points for potential breakouts. To the downside, 21-day Exponential Moving Average and the yearly +2 Standard Deviation Channel also align near that low close, forming a supportive zone from 35 to 36. If price does breach the recent intraday highs of 39.65, the yearly +3 SDC is around 40.54, so this could provide further resistance.

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