Intel in the Crossfire: Profit Slump and Hope for Growth

The chip giant Intel faces an exciting challenge with the release of its quarterly figures. Amid an ongoing transformation process that has caused the stock price to drop by 52% since the beginning of the year, the company is confronted with increasing competitive pressure. Meanwhile, its main competitor, Nvidia, is enjoying a stock boom of 154%. A recent Reuters report revealed issues at Intel, including problems with the manufacturing of 18A chips and a collapsed deal with Waymo for supplying chips for autonomous vehicles to save costs. The forecasts for the past quarter show an expected loss of $0.03 per share with revenue of $13 billion. This compares to a profit of $0.41 per share and revenue of $14.1 billion in the previous year. Intel's Client Computing segment is particularly affected, anticipating a revenue decline of 5% to $7.4 billion compared to the previous year, while the Foundry business struggles with a 6% decline to $4.4 billion. More positive notes are in the data center and AI segment, where a moderate revenue increase from $3 billion to $3.1 billion is expected—not a massive leap, but a step in the right direction. September also brought some positive developments: Intel announced new collaborations, including with Amazon Web Services and Microsoft, to develop custom chips. However, more partnerships are needed to put the Foundry business on a successful path. Challenges nevertheless remain. Broadcom tested Intel's manufacturing processes, but the results did not meet expectations. Additionally, Intel is grappling with a stagnating PC chip market, although sales are slowly recovering. With the introduction of the second generation of Core Ultra chips, which are designed for AI tasks and aim to rival Qualcomm's Arm-based chips in terms of energy consumption, Intel hopes to regain competitiveness. This development comes after Apple moved away from Intel processors to incorporate self-made Arm chips with better performance into its devices.