Intel Surges as Fourth-Quarter Revenue Forecast Exceeds Expectations
Intel's shares surge over 12% in extended trading after forecasting fourth-quarter revenue above estimates. The chipmaker reports a net loss for the third quarter but sees a resurgence in demand for PC chips. Revenue from the data center segment, including AI chips, grows by 9%, surpassing analyst estimates.
Despite reporting a significant net loss due to impairment and restructuring charges, Intel seems to be on a positive trajectory.
The chipmaker has faced challenges in the competitive landscape, particularly in the realm of advanced AI chips for data centers, an area where Nvidia and AMD have taken the lead. Intel's finance chief, David Zinsner, acknowledged the company's progress towards profitability but highlighted the need for further efforts to meet their targets.
For the third quarter, Intel reported a net loss of ÚS$16.6 billion, excluding certain noncontrolling interests, in contrast to a net profit of around $300 million in the same period last year. Despite this setback, Intel has seen a resurgence in demand for PC chips, driven by on-device AI features and a new Windows update cycle, surpassing Wall Street's modest expectations.
Revenue from Intel's Client Computing Group, encompassing PC chips for desktops and laptops, declined by 7% to US$7.3 billion, slightly below analysts' projections. However, the company anticipates a revenue range of US$13.3 billion to US$14.3 billion for the current quarter, exceeding the average analyst estimate of US$13.66 billion.
In the data center segment, which includes AI chips, Intel experienced a 9% revenue growth to US$3.3 billion, surpassing analyst expectations of US$3.16 billion. Despite facing stiff competition from AMD in the PC and server CPU market, Intel remains optimistic about the future, with plans for significant capital spending in 2025.
Intel's finance chief also revealed that the company's contract manufacturing business revenue decreased to US$4.4 billion, while the adjusted gross margin stood at 18%, falling short of analyst forecasts of 37.9%. Market strategist Ryan Detrick commended Intel's performance, stating, "Expectations were quite low for the company, and they exceeded those lowered expectations."
Intel's shares surge over 12% in extended trading after forecasting fourth-quarter revenue above estimates.
The chipmaker reports a net loss for the third quarter but sees a resurgence in demand for PC chips.
Revenue from the data center segment, including AI chips, grows by 9%, surpassing analyst estimates.
Source: REUTERS
