Though reiterating a Sell and $16 PT on Intel (INTC +1.5%), Goldman's James Covello thinks the chip giant's Q4 sales will beat its guidance midpoint ($13.7B, nearly even with a $13.72B consensus) when it reports on Thursday.
Maxim's Ashok Kumar made a similar prediction two weeks ago, while citing "upside seen in PC builds/shipments and data center demand."
Covello says a talk with president Renee James (appointed last year) was "the most open, engaging and friendly strategic dialogue we have had with [Intel] in 10 years," and left him with a much better grasp of Intel's strategy (though it still disagrees with parts of it).
He thinks Intel's new management is "more open to differing perspectives and is more attuned to market dynamics," and is looking to use its mobile processors to increase utilization rates (and thus margins).
At the same time, Covello believes Intel is better off focusing on its budding foundry business (where its manufacturing lead gives it an edge) than on mobile, and continues to think its "core advantage is in segments that require high processing power," rather than low power consumption.
Previous: Goldman unhappy with Intel's 2014 guidance and capex budget