Intel faces biggest revenue drop in five quarters

Intel is expected to report its largest revenue drop in five quarters, signalling a possible decline in its market position in data centres and personal computers. CEO Pat Gelsinger faces mounting pressure from shareholders to revive Intel’s status as a leading chipmaker, especially as rivals like AMD capitalise on the surging demand for AI-driven chips. Wall Street analysts anticipate an 8% revenue decline to $13.02 billion, highlighting the urgency for Intel to advance its manufacturing technology and regain competitiveness.

Despite recent moves, including job cuts and securing a chipmaking contract with Amazon, investors remain sceptical. Intel’s market value has fallen below $100 billion, and its stock is down over 50% this year. Calls are growing for Intel to spin off its struggling foundry business, which posted a significant operating loss of $2.55 billion due to high production costs. This manufacturing segment is often blamed for Intel’s weakened gross margins, which are expected to dip to 37.9%.

Intel’s struggles are compounded by a 17% decline in data centre revenue, the company’s 10th straight quarterly drop. Meanwhile, AMD has gained momentum, with its data centre revenue projected to double due to its AI-focused chips. With half of the analysts covering Intel lowering their revenue forecasts, expectations are already low, leaving investors hoping for a strategic turnaround in Intel’s business model.