Intel Faces Critical Earnings Report Amid Leadership Shake-Up

Intel (INTC) is set to release its fourth-quarter earnings report on Thursday after market close, marking its first financial update since the departure of CEO Pat Gelsinger. His exit followed mounting frustrations over the company’s ambitious yet slow-moving turnaround efforts.

Currently, Intel is being led by interim co-CEOs; David Zinsner, who also serves as CFO, and Michelle Johnston Holthaus, who is simultaneously the CEO of Intel Products. The company is still in the process of selecting a permanent CEO to steer its long-term strategy and reinvigorate its position in the semiconductor industry.

The past year has been particularly challenging for Intel, with its stock plummeting 54% over the last 12 months. Last quarter, the company recorded the largest quarterly loss in its history. However, Intel is not alone in its struggles—competitor AMD (AMD) has seen its stock decline by 36% over the same period. In contrast, Nvidia (NVDA) has experienced remarkable growth, surging 93% in the past year, despite a sharp drop on Monday due to concerns surrounding China’s DeepSeek AI.

Intel’s foundry division, designed both to manufacture its own chips and to serve as a contract producer for third parties, continues to weigh on the company’s overall revenue. Despite securing agreements to manufacture chips for Amazon Web Services (AMZN) and Microsoft (MSFT), the foundry business remains in its early stages and has yet to become a major driver of profitability.

Analysts expect Intel to report earnings of $0.12 per share on revenue of $13.8 billion for the quarter, according to Bloomberg consensus data. This marks a significant drop from the $0.54 per share and $15.4 billion in revenue reported during the same period last year. The company’s Client Computing division, which includes PC chips, is projected to generate $7.8 billion in revenue—down from $8.8 billion a year ago. Meanwhile, its data center business is forecasted to decline to $3.3 billion from $3.9 billion.

One bright spot is Intel’s foundry segment, which is expected to reach $4.5 billion in revenue, a dramatic increase from $291 million in the fourth quarter of 2023.

The company is actively expanding its U.S.-based chip manufacturing and research facilities. However, the PC market remains sluggish despite optimism that AI-powered computers could stimulate demand in 2024. Data from IDC indicates that PC shipments have grown by only 1% this year, leaving significant uncertainty about 2025.

According to Ryan Reith, group vice president at IDC’s Worldwide Device Trackers, broader economic concerns continue to overshadow the potential growth of AI PCs. While he maintains that on-device AI will ultimately have a positive impact on the industry, he acknowledged that the anticipated market shift may take longer than expected.

Intel’s data center division is also struggling to compete with Nvidia, which dominates the AI chip market. While Intel is making efforts to develop its own AI hardware, it remains far behind its rivals, with no clear timeline for when—or if—it will be able to close the gap.

As the company navigates leadership uncertainty and industry headwinds, its upcoming earnings report will offer a crucial glimpse into Intel’s ability to regain momentum in an increasingly competitive semiconductor landscape.

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