Intel bounces back with data centre boost

Intel cheered investors on Thursday as it forecast current-quarter revenue above estimates and beat expectations for the third quarter.
Despite a net loss of $16.6 billion against a net profit of $300 million a year ago, the chipmaker’s shares rose 9.6 per cent, or $2.05, to $23.58 in after-hours trading in New York.
Intel expects revenue of between $13.3 billion and $14.3 billion for the current quarter. Revenue at the data centre unit, which includes artificial intelligence chips, grew 9 per cent to $3.3 billion in the most recent three-month period.
Intel, based in Santa Clara, California, and founded in 1968 by Robert Noyce and Gordon Moore, has largely missed out on an investment boom in speedy, advanced AI chips for data centres as businesses double down on adopting generative AI technology, a market dominated by Nvidia.
David Zinsner, Intel’s finance chief, told Reuters the company was “making progress” on its profitability but that it had “a lot of work to do” to achieve the targets it has set.
As one of the largest makers of PC chips, Intel has benefited as the rollout of on-device AI features and a fresh Windows update cycle have renewed demand for PCs after a years-long slump, helping the company surpass Wall Street’s low expectations.
Revenue in Intel’s client computing group — which includes its PC chips for desktop and laptop computers — fell 7 per cent to $7.3 billion.
Analysts expect demand for traditional server chips made by Intel — its mainstay data-centre semiconductors — to pick up in the second half of the year after several quarters of soft demand as investment is funnelled to AI chips.
Intel’s share of the PC and server CPU market is consistently threatened by AMD, which now boasts a market valuation larger than that of Intel and is also the closest competitor to the market leader Nvidia in AI graphics processors.
Zinsner said the company planned $12 billion to $14 billion in capital spending in 2025.
Ryan Detrick, chief market strategist at Carson Group, a platform for financial advisers, said: “Let’s be honest, expectations were quite low for the company and they beat those lowered expectations.”