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INTC: Will Intel Stock Continue To Rally?

Shares of Intel Corp. (INTC) gapped higher on October 25, opening at $54.19 vs. prior close of 51.94, on heavy volume of 59.8 million shares vs. average trading volume of 19.9 million shares. The move, triggered by upbeat Q3 results and FY19 expectations, also helped the stock run to a new high of $63.71 yesterday. Will Intel shares continue to rally?

The latest Q4 earnings data and bullish FY20 outlook released yesterday after the bell suggest that Intel is definitely a stock to watch. In the pre-market hours today, shares of Intel are already up 6.2% and trading at $67.26, another new high.

The chipmaker closed a record 2019, with Q4 revenues up 8% and EPS up 19% from year-ago numbers. Demand for lucrative chips that power large cloud-computing centers is the key revenue driver for the company.

In a journey inspired towards a data-centric business model from a pc-centric one, the chipmaker posted all-time high annual revenue of $72 billion and $4.87 eps, vs. its own (Analyst Day) projections of $69 billion revenues and $4.35 eps. Revenues are up $16 billion since 2015, while the company has cut its spending by $500 million. The Chip giant generated Free Cash Flow (FCF) of $16.9 billion and returned 113% of FCF to shareholders 2019.

For 2020, Intel expects to reach eps of $5 and revenues of $73.5 billion, higher than the $4.68 eps and $72.25 billion revenue modelled by analysts. The company plans to achieve about $85 billion in revenues and $6 eps for the period 2022/2023.

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