3 min Devices

Intel exceeds low expectations without a CEO

Intel exceeds low expectations without a CEO

Intel’s quarterly earnings report provided a slightly positive surprise. It increased the company’s share value slightly, although the stock is still in a steep valley.

Revenue for Q4 was $14.3 billion, down 7 percent from the same quarter a year ago. For all of 2024, revenue was $53.1 billion, 2 percent below the 2023 results. The gross margin of 42.1 percent was better than the projected 39.5 percent, though. For Q1 2025, however, expectations were lower than the market had anticipated: $11.7 billion to $12.7 billion, down from the $12.87 billion forecast.

Intel has to make do with two interim CEOs these days now that Pat Gelsinger left last month. He himself has already joined startup Gloo. Intel is looking for a new direction and new leadership. In segments where it holds a powerful position, AMD is snatching away its market share. Elsewhere, it is still searching for solid ground: in terms of AI chips, Intel’s Gaudi barely competes versus Nvidia and AMD, and its own chip maker Foundry is still in its infancy versus TSMC and Samsung.

End of Falcon Shores

Speaking of Intel’s foundry ambitions: 2.2 billion dollars has already headed over to Intel from the U.S.’s CHIPS and Science Act. It’s earmarked for the expansion of the country’s chip fabrication facilities, which will take centre stage as president Trump’s tariff walls loom large against Taiwan, which would make fabs on U.S. soil critical in the overall supply chain.

Hard choices must be made elsewhere due to the challenging outlook for ‘Chipzilla’. Intel’s shares may be up 1.32 percent at the time of writing today, but that’s still a decline of 6.45 percent over the past five days. Most shocking are the comparisons to the stock market value at the beginning of 2024 (down 53.55 percent) and compared to five years ago (down 68.7 percent (!)). In short, today’s results are a stabilization of a worrisome position.

One of the hard choices is the cancellation of Falcon Shores, the long-awaited GPU that should have been competitive with Nvidia’s Blackwell chips and AMD’s Instinct series. The chip is now set to become an “internal test chip.” In other words, it has been practically canceled, possibly because it could not have met the market’s demands in terms of performance. Jaguar Shores is the code name of the GPU generation that will emerge, assuming Intel doesn’t cancel that one either in pursuit of cost-cutting.

Also read: Intel proposes a radical shift to modular PCs: why?