Intel (INTC) is scheduled to report first-quarter results after the bell on Wednesday, with investors and analysts watching for a recovery in the PC market and whether Intel's AI investments will work out for the semiconductor giant.
Intel aims to expand its AI market share by taking on rivals Nvidia (NVDA) and AMD (AMD) with its new Gaudi 3 AI accelerator, while also targeting consumer and enterprise customers with its new AI PC lineup. I hope it will fascinate you.
Wall Street expects Intel to report earnings of $0.13 per share and revenue of $12.7 billion this quarter, 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.
This quarter also marks the first time Intel will report earnings under its new corporate structure. In April, the company announced that it would report revenue from Intel's Client Computing Group, Data Center and AI, and Network and Edge segments of its Intel products division. Altera, Mobileye, and Others will now be reported in the All Other segment, and Intel's Foundry business will be reported in Intel's Foundry.
The Foundry segment will report revenue from manufacturing both Intel products and chips for third parties. However, in announcing the restructuring, Intel also revealed that its foundry business lost $7 billion 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 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.
“The new disclosure is [some of all parts]Base valuations suggest hidden value in foundry efforts, but much of the profitability improvement is reserved for the period beyond 2027, and in 2030 Intel will still be the largest Intel foundry. We remain calm because it appears to be 75% of our customers. ” UBS Global Research analyst Timothy Arcuri wrote in a recent research note.
During Intel's last quarter earnings call, CFO David Zinsner said he expected revenue from the company's data center and AI businesses to continue to decline by a double-digit percentage from the first quarter. But CEO Pat Gelsinger said at the time that such declines were highly seasonal from quarter to quarter. Still, Intel's performance has Wall Street excited as Nvidia's AI sales go through the roof.
Intel is also 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.
Click here for the latest earnings report and analysis, earnings whispers and expectations, and company earnings news.
Read the latest financial and business news from Yahoo Finstance.