Intel reports Q4 beats on top and bottom line, stock rises on external founder revenue outlook

Intel (INTC) announced its fourth quarter earnings on Thursday, beating estimates on the top and bottom line, but falling short on Q1 guidance. Still, the company said its nascent foundry business is expected to produce meaningful external revenue by 2027.

Shares of Intel rose 1% following the report

The report is Intel’s first since it ousted CEO Pat Gelsinger over frustrations related to his enormous turnaround plan for the company.

Intel is currently led by co-CEOs David Zinsner, who also serves as CFO, and Michelle Johnston Holthaus, who is also CEO of Intel Products. The company is still searching for a permanent CEO to take the reins and attempt to revitalize the storied chipmaker.

For the quarter, Intel reported earnings per share (EPS) of $0.13 on revenue of $14.3 billion. Analysts were anticipating EPS of 0.12 on revenue of $13.8 billion. The company saw EPS of $0.54 and $15.4 billion in revenue in the same quarter last year.

Intel, however, said it expects revenue between $11.7 billion and $12.7 billion in the current quarter. Analysts were looking for $12.85 billion. Adjusted gross margins are also set to come in at 36%, below the 39% Wall Street expected.

Intel stock is down a staggering 54% over the last 12 months and reported the largest quarterly loss in its history last quarter. Intel isn’t the only chipmaker hurting, though. Rival AMD (AMD) is down 36% throughout the last year. Nvidia (NVDA), however, continues to gain steam, rising 93% in the last year, despite suffering a massive rout on Monday on the back of worries related to China’s DeepSeek AI.

Intel’s still-nascent foundry business, which both produces chips for Intel and is designed to act as a contract manufacturer for third parties, continues to be a drag on its overall revenue despite announcing agreements to build chips for Amazon’s (AMZN) Amazon Web Services and Microsoft (MSFT).

Intel’s Client Computing business, which includes chips for PCs, saw revenue of $8 billion, versus expectations of $7.8 billion, while its data center business topped out at $3.39 billion. Wall Street was looking for revenue of $3.37 billion.

The Intel Foundry business, which produces chips for Intel and third-party partners, brought in 4.5 billion, in line with expectations.

Intel is working to build out new facilities to research and construct chips across the US, but the company is dealing with a relatively flat PC market despite promises that AI PCs would help buoy the space in 2024.

According to IDC, PC shipments rose just 1% in 2024, and there’s still plenty of uncertainty about 2025.

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“The overall macroeconomic concerns seem to be overshadowing some of the progress and excitement around AI PCs,” Ryan Reith, group vice president with IDC’s Worldwide Device Trackers, said in a statement.

“However, we maintain the view that the impact that on-device AI will have on the industry will be positive, even if the inflection point is delayed.”

The company’s data center business is also struggling to catch up to the likes of Nvidia. While Intel is working to develop its own AI chips, it’s still far behind market leaders, and there’s no clear understanding as to if and when it could catch up.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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