Intel CEO Pat Gelsinger said the company’s disappointing financial guidance reflects some overall weakness in market demand. But he sees better times ahead in the second half.
Intel is projecting June-quarter revenue of $12.5 billion to $13.5 billion with an adjusted profit of 10 cents a share. Wall Street projected revenue of $13.7 billion with an adjusted profit of 26 cents a share.
Gelsinger said in an interview that “everybody has seen that the market is just a little soft” in every area other than AI training. “We see that in every conversation” with customers, he said. And the CEO emphasizes that the issues he’s seeing are about overall demand and not specific to the company.
But he sees multiple positives for the second half. For one thing, he thinks that the inventory over-supply issues that many chip customers have experienced should be resolved. He also sees the coming termination of support by Microsoft for Windows 10 boosting second-half corporate PC demand. He also expects to see a ramp-up 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 gain traction for Gaudi 3, which will compete with chips from both Nvidia and AMD. He says Gaudi 3 offers a compelling total cost of ownership compared with Nvidia’s chips. He says Intel is seeing “a lot of enthusiasm in the enterprise market,” pointing to support from IBM and the South Korean cloud provider Naver, among others. Gelsinger says that enterprise customers want Intel.
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