Intel on Thursday posted December-quarter outcomes that beat analysts’ low expectations, whereas its forecast for current-quarter income missed estimates because the chipmaker grapples with tepid demand for its information middle chips and as traders look ahead to a brand new CEO.
Shares of the Santa Clara, California-based firm climbed 3.8 % in after-hours buying and selling. Final yr, Intel’s shares misplaced about 60 %.
The corporate’s quarterly outcomes and forecast had been overshadowed by questions on its long-term technique and efforts to switch former CEO Pat Gelsinger, who was ousted final month. Two interim co-CEOs at the moment run the previous No. 1 U.S. chipmaker which is struggling to catch as much as its rivals, particularly AI chip maker Nvidia.
As Intel undergoes a historic transition and makes an attempt to emerge from one in every of its bleakest intervals, it has additionally struggled to money in on a growth in funding in superior AI chips.
On a convention name with traders, Co-interim CEO Michelle Johnston Holthaus stated Intel was shelving its forthcoming graphics processing unit (GPU) design referred to as Falcon Shores, leaving it with no main new merchandise for AI clients. The corporate stated it deliberate to make use of Falcon Shores as an inner take a look at chip and concentrate on future information middle AI merchandise.
In its quarterly report after the closing bell, Intel stated it expects first-quarter income of $11.7 billion (roughly Rs. 1,01,359 crore) to $12.7 billion (roughly Rs. 1,10,010 crore), in contrast with analysts’ common estimate of $12.87 billion (roughly Rs. 1,11,498 crore) based on information compiled by LSEG.
Firms seeking to capitalise on generative AI expertise have prioritised spending on specialised AI processors that may churn big quantities of information, crimping demand for the standard server processors that Intel sells.
The corporate’s outlook for slower demand was as a result of “regular seasonality” and potential tariffs from President Donald Trump’s administration, interim co-CEO and Chief Monetary Officer David Zinsner stated in an interview.
Zinsner stated the specter of tariffs might have pushed clients to purchase extra of Intel’s chips forward of the primary quarter to keep away from increased prices ought to officers implement the tariffs.
Zinsner stated the corporate’s objective was to make sure working bills had been at roughly $17.5 billion (roughly Rs. 1,51,627 crore) for 2025.
Intel final yr scrapped a 2024 forecast that it will promote over $500 million (roughly Rs. 4,331 crore) value of its new AI processors, named Gaudi, suggesting they struggled to compete in opposition to Nvidia’s chips.
On an adjusted, per-share foundation, Intel forecast it will break even for the present quarter. Analysts anticipate adjusted revenue of 9 cents per share.
It’s spending closely to develop into a contract producer of chips for different corporations, main some traders to fret about strain on its money flows.
Holthaus stated in an interview the “board search was progressing” in its seek for a brand new CEO and till the choose is introduced “we’re centered and we all know precisely what must be accomplished.”
Buyers are on the lookout for readability round the way forward for the enterprise {that a} new chief govt would carry.
“The absence of a brand new CEO announcement might contribute to investor uncertainty, as management stability is essential for navigating this aggressive panorama and executing turnaround plans,” Operating Level Capital Chief Funding Officer Michael Schulman stated.
Intel reported fourth-quarter income fell seven % from a yr earlier to $14.26 billion (roughly Rs. 1,23,552 crore), beating estimates of $13.81 billion (roughly Rs. 1,19,609 crore).
Grants Intel acquired associated to federal CHIPS Act cash had been chargeable for a part of the corporate’s income and revenue margins that beat expectations within the fourth quarter, Zinsner stated.
The PC market – Intel’s largest by income share – noticed international shipments rise solely modestly final yr, underperforming analysts’ expectations of a robust rebound after months of declines.
The corporate has additionally been shedding share within the PC and server CPU market to rival AMD, a development analysts anticipate to proceed into 2025.
© Thomson Reuters 2025
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