Intel CEO Pat Gelsinger said the company’s disappointing financial outlook reflects a general weakness in market demand. But he sees better times ahead in the second half.
Intel expects revenue of $12.5 billion to $13.5 billion for the quarter with adjusted earnings of 10 cents per share. Wall Street forecast revenue of $13.7 billion with adjusted earnings of 26 cents per share.
Gelsinger said in an interview that “everyone has seen that the market is a little weak” in every area except AI training. “We see that in every conversation” with customers, he said. And the CEO emphasizes that the problems he sees are about general demand and not specific to the company.
But he sees several positives for the second half. First, he believes that the inventory oversupply issues that many chip customers have faced need to be resolved. He also sees Microsoft’s upcoming end of support for Windows 10 boosting PC demand in the second half of the year. He also expects an increase in the number of AI PCs in the second half, along with the launch of the company’s Gaudi 3 chip for AI data center applications.
Gelsinger expressed confidence that Intel can get traction with Gaudi 3, which will compete with chips from both Nvidia and AMD. He says Gaudi 3 offers attractive total cost of ownership compared to Nvidia’s chips. He says Intel is “seeing a lot of enthusiasm in the enterprise market,” pointing to support from the likes of IBM and South Korean cloud provider Naver. Gelsinger says business customers want Intel.
