Intel faces close market scrutiny as it reports quarterly results, with investors focused on whether supply chain disruptions are impeding the company's effort to scale chip production for rising demand from businesses adopting AI services. Company guidance indicates that constraints for server chips used alongside graphics processors from firms such as Nvidia will be worst in the first quarter and are expected to ease in the second quarter.
Market data compiled by LSEG points to an anticipated 1.9% decline in first-quarter revenue to $12.42 billion and a near 90% drop in adjusted earnings per share. Analysts expect the chipmaker's data center and AI segment to grow by 6.8% to $4.41 billion.
Recent strategic moves by the company include an expansion of its AI CPU partnership with Google and participation in Elon Musk's Terafab AI chip complex project to manufacture processors. Such developments come as analysts note the changing revenue mix for the firm.
"Rising demand for CPUs in AI data centers gives the company a steadier revenue lifeline that’s less dependent on the consumer PC cycle," eMarketer analyst Jacob Bourne said, highlighting the potential for greater revenue stability from data-center demand even as the consumer PC market remains variable.
Beyond top-line figures, investors are expected to examine manufacturing metrics. In particular, attention will center on yields from Intel's 18A manufacturing process, the measure of usable chips produced per silicon wafer. Yield rates will affect the company's ability to meet demand and scale production efficiently.
"For Intel to make an outsized bid here, their 18A yield improvement has to be ... better than market expectations," said Ryuta Makino, an analyst at Intel investor Gabelli Funds, underscoring the importance of manufacturing progress to the company's competitive position.
The report and these operational details will be viewed alongside questions about valuation. The piece poses the question: "Is INTC a bargain right now?" and notes a Fair Value calculator that uses a mix of 17 proven industry valuation models to assess stocks such as INTC.
Investors will monitor whether supply improvements materialize in the second quarter, whether the 18A process delivers stronger yields, and how these factors combine with the evolving revenue mix toward AI and data-center CPU demand.