Intel (INTC) released its first-quarter results after the bell on Thursday, with both revenue and bottom line exceeding analysts' expectations. However, the company's second-quarter outlook fell short of Wall Street expectations, and its stock price fell.
Intel said it expects second-quarter revenue to be between $12.5 billion and $13.5 billion. Analysts were expecting $13.63 billion for the next quarter.
Intel is aiming to expand its AI market share by taking on rivals Nvidia (NVDA) and AMD (AMD) with its new Gaudi 3 AI accelerator, while also expanding its AI PC lineup to consumers and business customers. I hope it will fascinate you.
Intel reported adjusted earnings per share (EPS) of $0.18 and revenue of $12.72 billion. Wall Street had expected EPS of $0.13 and revenue of $12.71 billion, according to consensus data compiled by Bloomberg. The company reported a loss of $0.04 per share on sales of $11.7 billion in the same period last year.
Intel is in the midst of a transformation from being a designer and manufacturer of its own chips to a manufacturer of chips for third-party customers. The company has previously revealed that Microsoft (MSFT) will be its first customer as the Windows maker looks to develop its own custom chips.
The first quarter will be Intel's first to report earnings under its new corporate structure. The company currently reports revenue from its Client Computing Group, Data Center and his AI, Network and Edge division under the Intel Products segment. Altera, Mobileye, and Others are currently reported under the All Other segment, and Intel's foundry business is reported under Intel Foundry.
The foundry's revenue comes from the production of Intel and third-party chips. However, in announcing the restructuring, Intel also revealed that its foundry business lost $7 billion last year.
The move puts Intel in direct competition with TSMC (TSM), the world's largest chipmaker. However, it is questionable whether the third-party foundry business will become a significant source of revenue.
Intel is looking to capitalize on the AI boom through the PC market with its new Core Ultra processors. The chip includes a neural processing unit (NPU) and is designed to run AI models on a laptop rather than in the cloud. The idea is that you can leverage AI apps without having to connect to the web or share data.
AMD, Intel's biggest rival in the PC space, also offers its own AI PC chips, but Nvidia says laptops with its chips are considered AI PCs as well. And on Wednesday, Qualcomm debuted its Snapdragon X Plus chip, in addition to the previously announced Snapdragon X Elite as a potential rival to Intel and AMD.
Qualcomm (QCOM) claims its chips can outperform certain Intel Core Ultra and AMD chips in performance and battery life. The company's new processor is expected to be released later this year.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Daniel Howley.
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