(Reuters) -Intel’s first-quarter revenue forecast on Thursday missed analyst estimates, as the chipmaker grapples with tepid demand for traditional data center chips and declining share in the key personal computer market.
Shares of the Santa Clara, California-based company fell close to 2% in volatile extended trading. Last year, Intel’s shares lost about 60%.
As the chipmaker undergoes a historic transition and attempts to emerge from one of its bleakest periods, it has also struggled to cash in on a boom in investment in advanced AI chips – a market led by Nvidia.
In its quarterly report after the bell, Intel said it expects first-quarter revenue of $11.7 billion to $12.7 billion, compared with analysts’ average estimate of $12.87 billion according to data compiled by LSEG.
Companies looking to capitalize on generative AI technology have prioritized spending on specialized AI processors that can churn huge amounts of data, crimping demand for the traditional server processors that Intel sells.
The company’s outlook “reflects seasonal weakness magnified by macro uncertainties, further inventory digestion and competitive dynamics,” interim co-CEO and chief financial officer David Zinsner said in a statement.
Intel last year scrapped a 2024 forecast that it would sell over $500 million worth of its new AI processors, named Gaudi, suggesting they struggled to compete against Nvidia’s chips.
On an adjusted, per-share basis, Intel forecast it would break-even for the current quarter. Analysts expect adjusted profit of 9 cents per share.
It is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows.
Former CEO Pat Gelsinger was ousted last month, leaving two temporary co-CEOs at the helm and shrouding Intel’s turnaround strategy in uncertainty.
Intel reported fourth-quarter revenue fell 7% from a year earlier to $14.26 billion, beating estimates of $13.81 billion.
The PC market – Intel’s largest by revenue share – saw global shipments rise only modestly last year, underperforming analysts’ expectations of a strong rebound after months of declines.
The company has also been losing share in the PC and server CPU market to rival AMD, a trend analysts expect to continue into 2025.
(Reporting by Arsheeya Bajwa in Bengaluru and Max Cherney in San Francisco; Editing by David Gregorio)
Intel’s revenue forecast disappoints as investors await new CEO
Investors were left disappointed as Intel’s revenue forecast fell short of expectations, signaling potential challenges ahead for the semiconductor giant. The company’s revenue forecast for the upcoming quarter came in at $18.2 billion, missing analyst estimates of $18.55 billion.
The underwhelming forecast comes as Intel continues its search for a new CEO, following the departure of former chief executive Bob Swan earlier this year. The company has been facing increased competition from rivals such as AMD and Nvidia, as well as ongoing supply chain issues.
Investors are eagerly awaiting the appointment of a new CEO, hoping that fresh leadership will help steer the company back on track. Intel has been struggling with production delays and has faced criticism for falling behind in the race to develop cutting-edge chip technology.
Despite the disappointing forecast, Intel remains a key player in the semiconductor industry and has a strong track record of innovation. The company is expected to announce its new CEO in the coming months, with many hoping that the new leadership will bring a renewed sense of direction and growth to the company.
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