Intel, American Express & Visa, Spirit Airlines: Top Stocks

Intel (INTC) slips further into the red ahead of Friday's closing bell as the chipmaker's first-quarter 2024 forecast weighs on the stock.

Payment card companies American Express (AXP) and Visa (V) reported earnings. AmEx shares move higher after missing on earnings estimates, while Visa stock dips despite an earnings beat.

Lastly, shares of Spirit Airlines (SAVE) pullback after JetBlue Airways (JBLU) warned that it could back out of its merger with the discount operator ahead of the deal deadline.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

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JOSH LIPTON: Check out shares of Intel. They are in the red as the chipmaker's first-quarter guidance came in below expectations. You could see Intel getting shelled in today's trade, Julie, down about 12%. By the way, that stock is now down about 30% since Pat Gelsinger took charge as CEO. So Q4 results beat, but the focus is on that guide, the Q1 forecast, which was weak relative to consensus.

And just some puts and takes here to consider. The division that includes PC chips, that saw sales jump more than 30%. But the data center and AI segment, which is where Intel is really looking to take on Nvidia, the big player there, sales dropped 10%.

JULIE HYMAN: Yeah, and just to put this in perspective again, as you talked about, yes, the stock is down since he took over again, but it is still up over the past year because hopes had been rising that he would be able to turn things around, that there would be a comeback for Intel, that it would be able to capitalize on the AI chip craze. So the shares are still up about 45% over the past year, even with today's decline, which is the largest single-day drop for the stock going back to July of 2020. So now the question is, Is this a fundamental hit to the optimism? or, Are we going to continue to see them recover in the coming months?

The other measure that people were watching closely with Intel is its gross margin, which had regularly been around 60% if you look at a pre-2019 time frame. In the first quarter, it's going to be 44 and 1/2%. And the company is trying to work back to that gross-margin level where it was in the past, and obviously it still has some ways to go there as it does these efforts to start a foundry-- restart a foundry business and, indeed, capitalize on AI.

JOSH LIPTON: Yeah, we should mention, you know, Intel's Pat Gelsinger was on Yahoo Finance this morning saying the stock reaction today is an overreaction, in his opinion. He was talking about the tailwinds as he sees them-- the AI, PC, the improving product line. Told us the foundry business-- so making chips for others-- revenues will ramp in 2025 and beyond. But clearly investors, at least in today's trade, skeptical.

JULIE HYMAN: One of the people we both follow closely, Stacy Rasgon over at Bernstein. His title of his note today, "How many times can you push the reset button?" Talking about investors getting fatigued here.

JOSH LIPTON: Stacy pointing out the great Intel reset story probably just shifted again, in his opinion, to 2026.

JULIE HYMAN: Right. All right, let's talk about another duo of stocks that we are watching, payment companies going in opposite directions today. On the one hand, American Express in the green up about 7%. It missed on the top and bottom lines here, but the company did forecast earnings that are ahead of estimates.

And Visa on the flip side here despite an earnings beat. We're seeing some weak commentary from Wall Street analysts who are looking at a consumer slowdown, potentially, in January.

Let's talk AXP quickly here. Part of the reason it missed last quarter, it said, was because of the Argentina currency devaluation. So that might be part of the reason why investors are looking past.

JOSH LIPTON: Yeah, they said, listen, if it hadn't been for that, they said we would have beat.

JULIE HYMAN: Right, so maybe that's a little bit of the reason that investors are looking past those more negative numbers and bidding up the stock. And then Visa kind of the opposite situation there.

JOSH LIPTON: Yeah, and it was interesting comments from the American Express CEO talking to our own Brian Sozzi about the economy, saying, listen, I think it's slowing, he said, talking about the economy. And that's what's in our guidance, slightly lower economy, not a recession, he told Sozzi, but a slightly lower economy. And he was saying, listen, with our business model, we think we can perform even in that kind of environment, a slower-growth economy, sounding very confident there to Brian.

JULIE HYMAN: Yeah, it's interesting, though, on the Visa side because it does look like that a lot of the analysts were relatively positive in the commentary around the stock. But to your point, there is some concern over January numbers and how spending there is going to look and that there is a softish start to the second quarter, according to one analyst over at KeyBanc.

JOSH LIPTON: Yeah, I thought it was interesting on Visa. Dan Dolev over at Mizuho-- smart guy. We know him. Always one of those guys I pay attention to-- telling his clients on Visa, first quarter was strong, but he kind of did call out this softer-than-expected trends in January and higher opex guidance. So he's staying on neutral there.

And finally, check out shares of Spirit Airlines in the red as JetBlue could be walking away from their deal. In an SEC filing, JetBlue states that certain conditions of the deal require for closing may not be met in time. So you've got to-- this one you've got to follow the bouncing ball of this story. So Spirit really tanking here in today's trading. The news with JetBlue saying, OK, we might end this bid to buy the carrier. Of course, this comes after that judge blocked the deal, right?

And JetBlue is now saying there are conditions to the deal that might not be met by the deadline in this agreement, and that could lead to termination, maybe as soon as this weekend, Julie. We don't know what terms exactly it sounds like they're being referred to here. But now Spirit then hitting back pretty hard and publicly. So a war of words beginning here.

JULIE HYMAN: Yeah, and this is a change because both of them had been trying to fight the regulatory pressures on them to not get the deal done. Now they're turning on each other, and both of them have something to lose here. JetBlue will owe Spirit if the deal is blocked for antitrust reasons, but Spirit might owe JetBlue money also if the deal falls apart for other reasons.

So, you know, not-- they obviously have something to lose because they'll have to pay each other, but they'll also have something to lose because they were hoping to get stronger by teaming up here. You know, JetBlue was counting on getting those Spirit planes to try to increase its fleet. So it's definitely a messy situation.

JOSH LIPTON: I mean, Spirit at this point, you just kind of wonder what the options are because we've had financial analysts on our show who know the company really well, and they were talking about, you know, possible bankruptcy. So a story to keep watching.

JULIE HYMAN: Well, Frontier was out there before as a buyer too, but maybe they're not willing to step back in now that they've seen what has gone on.