Intel is set to face tough questions from investors about its search for a new CEO as it announced its quarterly results on Thursday.
Revenue came in at $14.26 billion, beating the projected $13.81 billion. However, revenue declined 7% year-over-year, marking the third consecutive quarter of decline. Net loss for the quarter stood at $126 million, or 3 cents per share, compared to a net income of $2.67 billion, or 63 cents per share, a year earlier.
These results come as Intel grapples with falling PC demand, shrinking data centre market share, and uncertainty surrounding its leadership, as last month, it announced the retirement of CEO Pat Gelsinger after a 40-year career.
Just after, the company announced David Zinsner, executive vice president and chief financial officer, and Michelle Johnston Holthaus, CEO of Intel Products, as interim co-CEOs.
“Our Q1 outlook reflects seasonal weakness magnified by macro uncertainties, further inventory digestion and competitive dynamics,” said Zinsner during the call. To this, Holthaus added, “Dave and I are taking actions to enhance our competitive position and create shareholder value.”
This raised concerns about the future of its plan to expand into contract chip manufacturing—an initiative strongly backed by Gelsinger.
The chipmaker giant reported a fourth-quarter loss per share of $(0.03) on a GAAP basis, while non-GAAP earnings per share (EPS) stood at $0.13. For the full year, GAAP EPS was deeply negative at $(4.38), with non-GAAP EPS at $(0.13).
Looking ahead, Intel expects Q1 2025 revenue to be between $11.7 billion and $12.7 billion, signalling further declines.
The company also said in the release that it continues to lead the AI PC category. It’s on track to ship more than 100 million AI PCs by the end of 2025 and is working with more than 200 ISVs across more than 400 features to optimise its software on Intel silicon.
No Falcon Shores in the Market Anymore
Intel has officially scrapped plans to bring Falcon Shores to market instead of repurposing it as an internal test chip. The decision comes as the company shifts its focus towards streamlining its roadmap and concentrating resources. This is bound to challenge Intel’s competitive edge in the Indian market compared to other companies like NVIDIA and AMD.
“We have learned a lot as we have ramped up Gaudi, and we’re applying those learnings going forward,” Holthaus stated during the earnings call. “Based on industry feedback, we plan to leverage Falcon Shores as an internal test chip only without bringing it to market.”
The company has now acknowledged that expectations for Falcon Shores had already been toned down last month. The move aligns with Intel’s strategy to develop a system-level AI data centre solution at rack scale centred around Jaguar Shores.
Intel’s AI Data Centre Struggles
Intel sees long-term potential in the AI data centre market but admits it is not where it wants to be today. “This is an attractive market for us over time, but I am not happy with where we are today,” Holthaus said.
However, the company has yet to establish a meaningful presence in the cloud-based AI data centre market. Intel is focusing on simplifying its AI roadmap and reallocating resources.
Holthaus also highlighted a broader shift in Intel’s AI strategy, emphasising that AI is not a traditional market but an enabling technology that must integrate seamlessly across computing environments.
