Intel CEO Gelsinger's optimism sends shares up

Any indications of Intel’s turnaround prospects draw attention, and that was the case on Thursday when modestly positive remarks from CEO Pat Gelsinger sparked a rally for the chipmaker’s stock (Nasdaq: INTC).

“At this point, we say we’re above the midpoint of our guide for Q3, so we’re feeling good about Q3 as that progresses,” Bloomberg quoted Gelsinger saying at a Deutsche Bank technology conference.

Gelsinger also disclosed that an unnamed customer prepaid capacity on Intel’s upcoming 18A production node in Arizona, leading Intel to speed development of plants there.

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After muddling along in early trading, Intel rose about 3% following reports of Gelsinger’s statements. Shares ended the day up 1.8% at $35.14.

Intel guided revenue of $12.9 billion to $13.9 billion in the third quarter when it delivered its second-quarter results in late July. It reported sales of $12.9 billion for Q2 — past its $12 billion midpoint guidance and consensus analyst forecasts just above $12 billion.

So above midpoint would mark continued gains for the company after sales bottomed out in the first quarter.

Still, Intel had sales of $15.3 million in last year’s third quarter, indicating it has more lost ground to regain.

“Overall, as we look at the current environment, obviously we’ve been through a strong bust-boom cycle,” Gelsinger said. The company saw demand surge at the height of the Covid-19 pandemic and people were working and learning from home.

The CEO also talked more broadly about Intel’s progress on a turnaround strategy set in motion after he was named to the company’s top post in early 2021.

“We’re 2.5 years into the transformation,” he said. “Now, it’s sort of gone the way I would have expected at the time in terms of rebuilding the company. You have to be much less skeptical about our ability to pull this off.”

Intel is Oregon's largest private employer, with about 22,000 workers in Washington County.