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Intel (NASDAQ:INTC) just pulled off an earnings beat, posting Q4 revenue of $14.26 billionabove the $13.81 billion expected. Adjusted EPS came in at $0.13, surpassing the $0.12 estimate. But the market isn't fully buying in. The real problem? Intel is shelving its Falcon Shores AI GPU, pivoting to a new data center product, Jaguar Shores. Meanwhile, its contract manufacturing expansion is squeezing cash flow, raising fresh concerns. Intel's Client Computing Group, responsible for PC chips, saw revenue drop 9% to $8.02 billion. The Data Center and AI segment fell 3% to $3.39 billion. The one bright spot? Its Network and Edge unit, up 10% to $1.62 billion.
The chipmaker's Q1 outlook disappointed, with projected revenue of $11.7 billion to $12.7 billion, missing the $12.87 billion consensus. Management blamed seasonality, inventory digestion, and the looming risk of tariffs for the weak outlook. The AI chip war with Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD) is heating up, and Intel is still playing catch-up.
Investors are still waiting on a new CEO, with interim co-CEOs David Zinsner and Michelle Johnston Holthaus holding down the fort. Intel's roadmap includes 18A process technology, expected to hit mass production in late 2025, and the launch of next-gen Panther Lake laptop chips later this year. The company locked in a $7.86 billion U.S. government grant for manufacturing, but none of this guarantees a comeback. Intel needs a game-changing moveand fastto regain lost ground in the AI race.
This article first appeared on GuruFocus.