On October 31, 2024, Intel (INTC.O) expressed optimism about its future in the PC and server markets, forecasting current-quarter revenues that exceed analyst estimates despite reporting significant losses. Following the announcement, Intel's shares surged more than 7% in extended trading.
The chipmaker reported third-quarter revenues above expectations but faced a substantial net loss of $16.6 billion, largely attributed to impairment and restructuring charges. This marked a stark contrast to a net profit of about $300 million in the same quarter the previous year. Intel's finance chief, David Zinsner, acknowledged the progress made toward profitability but emphasized that the company still had "a lot of work to do."
The revenue for Intel's Client Computing Group, which encompasses PC chips for desktops and laptops, declined by 7% to $7.3 billion, slightly below analysts’ forecasts. However, the company expects revenue in the range of $13.3 billion to $14.3 billion for the current quarter, surpassing the average analyst estimate of $13.66 billion.
Intel's data center segment, which now includes AI chips, saw a revenue increase of 9% to $3.3 billion, outpacing analysts' estimates of $3.16 billion. Despite this positive trend, Intel's market share in both the PC and server CPU sectors remains challenged by AMD, which has surpassed Intel in market valuation and is a close competitor to Nvidia in the AI graphics processor space.
Looking ahead, Zinsner outlined plans for capital expenditures between $12 billion and $14 billion in 2025, while Intel CEO Pat Gelsinger announced that high-volume production of its advanced 18A node would commence in the second half of 2025. Gelsinger also indicated that for the next few years, foundry revenue would be primarily driven by Intel’s own products, with selective use of contract chipmaker TSMC (2330.TW) for manufacturing. Despite the challenges, analysts suggested that Intel performed well in the quarter, particularly given the low expectations prior to its results.
