Intel stock price rally faces a major test on April 23

Intel stock price has soared recently and is now hovering at its all-time high, helped by several important announcements. This surge will be put to the test on April 23 when the company publishes its financial results. It was trading at $68.50, a few points below the record high of $70.

Why Intel stock has gone parabolic

Intel, a company that once dominated the semiconductor industry, has become a fallen angel as it lost market share in the CPU and GPU industries. NVIDIA is now dominating the GPU segment, while AMD has become a popular name in the CPU and GPU industries. 

The company has gone vertical in the past few weeks, continuing an uptrend that started last year. Its recovery started after top companies like NVIDIA and Softbank acquired stakes in the company. The US government also participated in the investment, and has already made over $30 billion in paper profits.

Most recently, the company said that Google would use its Xeon GPUs for its AI workloads. This is important as Google is one of the biggest NVIDIA customers. Google has also built its TPU processors that are expected to continue growing.

Intel stock also jumped after announcing its participation in Elon Musk’s Terafab project in Texas. Additionally, it recently repurchased a fabrication plant in Ireland from Apollo Global Management, a deal that raised confidence among investors.

Upcoming Intel earnings to shed color on its business

This week will be a crucial one for Intel as it will put the ongoing rally to the test as it publishes its financial results. These results will provide more information on its turnaround strategy.

Wall Street analysts expect the company to publish relatively weak results, which will show that its revenues dropped last quarter. The average estimate is that its revenue dropped by 2.1% to $12.40 billion. Its earnings-per-share (EPS) are expected to move from $0.13 to $0.01.

Still, these results will provide investors with more cues on its business. As such, it is possible that the stock will keep going up even when the revenues and profits fall. 

Instead, traders will focus on its forward guidance. Analysts anticipate the results to show that its annual revenue will be $54.2 billion, up by 2.58%. It will then be followed by $58.60 billion next year.

INTC stock price forecast

Intel stock chart | Source: TradingView

In our last Intel stock price analysis, we noted that it had formed a cup-and-handle pattern, pointing to more gains this year. This view still stands. 

However, there is a risk that the stock will pull back in the near term. For one, it has become highly overbought as the Relative Strength Index (RSI) and Stochastics have continued soaring.

Also, the stock remains much higher than the 50-week and 100-week moving averages. As such, there is a risk that mean reversion will happen soon. 

Such a move may see it drop to the key support level at $50.86. This situation is known as a break-and-retest and is one of the most common bullish continuation signs in technical analysis. A retest to that level will confirm the bullish outlook and raise the possibility of it rising to $100 later this year.