Intel (INTC) announced its first-quarter earnings results after the bell on Thursday, beating analysts’ expectations on the top and bottom lines. But the company’s second-quarter outlook fell short of Wall Street estimates, sending the stock falling.
Intel said it expects second-quarter revenue of between $12.5 billion and $13.5 billion. Analysts were expecting $13.63 billion in the upcoming quarter.
Intel is looking to grow its AI market share by challenging rivals Nvidia (NVDA) and AMD (AMD) with its new Gaudà 3 AI accelerator, while it hopes to woo consumer and enterprise customers with its AI PC lineup. .
Intel reported adjusted earnings per share (EPS) of $0.18 on revenue of $12.72 billion. Wall Street was expecting EPS of $0.13 and revenue of $12.71 billion, according to consensus data compiled by Bloomberg. The company reported a loss of $0.04 per share on revenue of $11.7 billion in the same quarter last year.
Intel is in the process of transforming itself from a designer and manufacturer of its own chips to a manufacturer of chips for third-party customers. So far, the company has revealed that Microsoft (MSFT) will be one of its first customers, as the Windows maker looks to develop its own custom chips.
Intel is reporting earnings under its new corporate structure for the first time in the first quarter. The company now reports revenue from its Client Computing Group, Data Center & AI, and Network & Edge divisions under its Intel Products segment. Altera, Mobileye, and others now report under the All Other segment, while Intel’s foundry business reports under Intel Foundry.
The foundry’s revenue comes from the production of Intel and third-party chips. However, in announcing the restructuring, Intel also revealed that its foundry business lost $7 billion last year.
The move puts Intel in direct competition with TSMC (TSM), the world’s largest chip maker. But it is doubtful that the third-party foundry business will ever be a significant source of revenue.
Intel is trying to cash in on the AI ​​craze sweeping through the PC market with its new Core Ultra processors. The chips, which feature a built-in neural processing unit (NPU), are designed to run AI models on your laptop rather than in the cloud. The idea is that you can take advantage of AI apps without connecting to the web or sharing your data.
AMD, Intel’s main rival in the PC sector, is also offering its own AI PC chips, while Nvidia says laptops running on its chips are also considered AI PCs. And on Wednesday, Qualcomm introduced its Snapdragon X Plus chip to go along with its previously announced Snapdragon X Elite as potential rivals to Intel and AMD.
Qualcomm (QCOM) claims that its chips can surpass some Intel Core Ultra and AMD chips in terms of performance and battery life. The company’s new processors will be available for sale later this year.
Email Daniel Hawley at [email protected]. Follow him on Twitter @DanielHawley,
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