US chipmaker Intel reported a decline in profits in the past quarter, with revenues falling 4% year-on-year to $13.7 billion. The company announced this in its earnings report. The outlook for the current quarter fell short of estimates, and shares weakened significantly after Thursday’s trading. Intel is struggling with supply issues and is finding it difficult to meet demand for traditional server chips used in data centers with artificial intelligence (AI).
Intel’s decline
Intel forecasts revenue for the current quarter of between $11.7 billion and $12.7 billion. According to LSEG data, analysts had estimated average revenue of $12.51 billion. In the previous quarter, Intel exceeded analysts’ expectations despite a decline in revenue and a net loss.
Intel once dominated the semiconductor market, but has been struggling for years. Nvidia, which specializes in graphics cards, has gained a leading position, particularly in the market for artificial intelligence (AI) chips. Intel is also under pressure in its core business of personal computer processors and data center chips.
Investor confidence is growing
However, investor confidence in the company’s recovery remains high, according to Reuters. Last year, Nvidia invested $5 billion in Intel, SoftBank invested $2 billion, and the US government acquired a 10% stake.
After a more than 60 percent drop in share price in 2024, the company’s shares rose 84 percent last year. They thus significantly outperformed the semiconductor index. So far this month, Intel’s shares have risen more than 40 percent, but they weakened significantly before the start of today’s trading.
Source: Reuters
