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CEO Pat Gelsinger said that despite expectations not being met with this quarter’s forecast, he is confident in his plans to drive growth this year with a focus on AI.
While a focus on AI is paying off for companies like Google, Microsoft and Nvidia, Intel seems to be having a slightly tougher time with its traditional chips for PCs and data centres.
Revenue made by Intel in its latest quarter is up 9pc from last year to $12.7bn as CEO Pat Gelsinger said in an earnings call yesterday (25 April) that the chipmaker is making “steady progress” against its long-term priorities.
However, the company’s lower-than-expected forecast for the second quarter of the year has concerned some investors as Intel shares fell around 8pc after the call.
“Strong innovation across our client, edge and data centre portfolios drove double-digit revenue growth in Intel products,” said Gelsinger, revealing earnings figures for the first time since its chip manufacturing business Intel Foundry was accounted for separately.
“We are on track to regain process leadership next year as we grow Intel Foundry. We are confident in our plans to drive sequential growth throughout the year as we accelerate our AI solutions and maintain our relentless focus on execution, operational discipline and shareholder value creation in a dynamic market.”
CFO David Zinsner said that the company’s new foundry operating model is “already driving better decision-making” across the business as revenue met expectations thanks to better-than-expected gross margins and what he called a “strong expense discipline”.
Revenue from Intel Foundry was down 10pc to $4.4bn. Earlier this year, the company shared details of its financial results from the past few years, showing a significant decline for its foundry business – which reported operating losses of nearly $7bn last year. These losses are expected to grow.
To keep up in the global AI race, Intel unveiled a new AI chip called Gaudi 3 this month that it claims has better performance and energy efficiency than its Nvidia counterpart, the popular H100.
Philip Kaye, co-founder and director at Vesper Technologies, thinks that Intel’s earnings highlight the competitive landscape for data centre CPUs and the shift in the market to AI silicon.
“It’s not all doom and gloom though, as we’ve seen with Nvidia, the market for AI-focused hardware is huge and only continuing to grow. Intel has also diversified into large-scale manufacturing, building several new fabs, which is a long-term strategy,” he said.
“I am optimistic about their future in manufacturing and that they will recapture some of the market share they’ve ceded to competitors recently. The company is full of brilliant minds and active leadership.”
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