Intel’s Q2 Forecast Disappoints, Shares Plunge Amid AI Chip Market Struggles

Intel's Q2 revenue and profit forecast falls short of expectations, leading to an 8% plunge in shares.

  • Intel’s Q2 revenue and profit forecast falls short of expectations, leading to an 8% plunge in shares.
  • Weak demand for conventional data center and PC chips, coupled with AI chip market competition, contribute to downturn.
  • Despite challenges, Intel ventures into AI chip development with Gaudi series to challenge Nvidia’s dominance.

Intel faces a setback as its projected second-quarter revenue and profit fail to meet market expectations, resulting in an 8% drop in shares. The decline is attributed to weakened demand for its conventional data center and PC chips, compounded by intense competition in the booming market for AI components.

While Nvidia commands an impressive 80% share in the AI chip market, Intel aims to challenge its dominance with the Gaudi series. CEO Pat Gelsinger remains optimistic, projecting revenue exceeding $500 million for Intel’s Gaudi AI chips this year. However, the outlook for Intel’s second-quarter revenue and adjusted earnings falls short of analysts’ estimates, signaling ongoing challenges.

Despite the hurdles, Intel is determined to revitalize its position in the market. The company anticipates a rebound in PC sales driven by upcoming upgrades and software launches. Additionally, Intel’s foray into AI chip development underscores its commitment to innovation and competition in the tech sector.