Intel has staged a dramatic financial comeback, with shares exploding by more than 25% after the company crushed Wall Street expectations in its latest earnings disclosure.
Coming off a year where shares dropped to their lowest level in more than a decade, Intel has rebounded in a big way. This was evident during trading on Friday, 24 April, not long after Intel's first-quarter earnings report.
The company said it expected revenue of between $13.8 billion and $14.8 billion for the second quarter, clearly above Wall Street's projected $13.03 billion.
Aside from that, there was a notable jump in their earnings per share (EPS). In the first quarter, the company reported adjusted EPS of $0.29 on $13.6 billion in revenue. Wall Street was expecting only EPS of $0.01 and revenue of $12.36 billion perBloomberganalysts.
Also, Intel's Data Centre and artificial intelligence (AI) business generated $5.1 billion in revenue, well above the $4.41 billion forecast. Given these jumps in numbers and the rising demand for chips, there is reason for Intel to be optimistic.
'The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic. This shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings,' Intel CEO Lip-Bu Tan stated viaYahoo Finance.
With chip shortages a known fact, Intel practically squeezed every chip it could get from its current inventory. That included checking the inventory of their finished goods and the chips they had on hand. In the end, they were surprised that even chips with a small chance of moving were sold.
'It was either de-spec product or legacy product we had shelved and then we worked with customers. That helped a lot. I am not sure we have that benefit in the second quarter,' Intel CFO David Zinsner said viaReuters.com.
Having witnessed that, there is reason for Intel to be optimistic that revenue can only go up moving forward. TheAI boomis real, and its reliance on CPUs is a given.
Although some AI models have relied heavily on GPUs, it remains that they still need a CPU to perform well. However, a major problem is the chip shortage, a problem Nikkei Asia believes may last until 2027.
Source: International Business Times UK
