Intel's Multiple Expansion Faces Q2 Earnings Test

Intel shares have rallied over the past year. The gain was driven largely by multiple expansion rather than earnings growth, the Seeking Alpha author argued. The company is set to report its second-quarter results, and the current valuation leaves little room for error.

The author, who disclosed long positions in TSM and AVGO, sees risks if Intel's earnings fail to justify the price. An earnings miss or cautious guidance could compress the multiple. A strong report would support the current price.

AlphaScala's proprietary score rates INTC at 35 out of 100, labeled Weak. By comparison, AVGO scores 53 (Mixed) and TSM scores 61 (Moderate).

Intel's Q2 report will be the next catalyst. The market will watch revenue and data-center demand. No date has been set for the earnings release.