In This Article:
By Max A. Cherney and Arsheeya Bajwa
(Reuters) -Intel on Thursday posted December-quarter results that beat analysts' low expectations, while its forecast for current-quarter revenue missed estimates as the chipmaker grapples with tepid demand for its data center chips and as investors wait for a new CEO.
Shares of the Santa Clara, California-based company climbed 3.8% in after-hours trading. Last year, Intel's shares lost about 60%.
The company's quarterly results and forecast were overshadowed by questions about its long-term strategy and efforts to replace former CEO Pat Gelsinger, who was ousted last month. Two interim co-CEOs currently run the former No. 1 U.S. chipmaker which is struggling to catch up to its rivals, especially AI chip maker Nvidia.
As Intel 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.
On a conference call with investors, Co-interim CEO Michelle Johnston Holthaus said Intel was shelving its forthcoming graphics processing unit (GPU) design called Falcon Shores, leaving it with no major new products for AI customers. The company said it planned to use Falcon Shores as an internal test chip and focus on future data center AI products.
In its quarterly report after the closing 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 for slower demand was due to "normal seasonality" and potential tariffs from President Donald Trump's administration, interim co-CEO and Chief Financial Officer David Zinsner said in an interview.
Zinsner said the threat of tariffs may have pushed customers to buy more of Intel's chips ahead of the first quarter to avoid higher costs should officials implement the tariffs.
Zinsner said the company's goal was to ensure operating expenses were at roughly $17.5 billion for 2025.
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.