Intel surprises with solid quarterly forecast, challenges remain

The US chip giant Intel has positively surprised with its current results and exceeded expectations for the fourth quarter, leading to a nearly 7% rise in shares in after-hours trading. Pat Gelsinger, Intel's CEO, expressed optimism about the company's prospects despite a challenging market environment in an interview with Yahoo Finance. However, a closer look at the quarterly results reveals that the markets' restrained euphoria might be somewhat exaggerated. Intel reported non-cash expenses of $15.9 billion, associated with inventory write-downs and disappointed performance expectations. The business with the self-driving company Mobileye, in which Intel holds a majority stake, also fell short of expectations. Additionally, Intel Foundry, the emerging chip manufacturing division, reported an operating loss of $5.8 billion on revenues of $4.4 billion. Despite the challenges, Intel is sticking to its ambitious plans and intends to further expand chip production in Ohio and Arizona, even though the promised billions from the state CHIPS Act are still pending. The Biden administration has allocated $8.5 billion for Intel's projects, but the disbursement of these funds has been delayed so far. Financial markets remain vigilant. Analysts, such as Toshiya Hari from Goldman Sachs, caution that Intel faces a rocky path in a fiercely competitive market where rivals like Nvidia, AMD, and TSMC act as strong competitors. In particular, the development of technology in the area of AI chips will take time to catch up with the competition.