Chip makers struggle to report results as PC sales plummet

Finance


Struggling chip maker Intel (INTC) is set to report first-quarter earnings after Thursday’s bell as it continues to grapple with a decline in its overall data center and PC business.

Investors are watching Intel’s margins and signs of life in the upcoming computing market as it continues to invest in new chip manufacturing facilities.

What do Wall Street analysts expect from the company this quarter compared to the same period last year, according to Bloomberg data.

  • Earnings: Expected $11.1 billion vs. $18.4 billion in Q1 2022

  • Adjusted EPS: -$0.15 forecast vs $0.87 in Q1 2022

  • Client Computing: Expected $4.9 billion vs. $9.3 billion in Q1 2022

  • Data Center and AI: $3.5 billion, expected to reach $6 billion in Q1 2022

Intel is in the midst of a massive revitalization campaign by CEO Pat Gelsinger working to regain lost market share from rival AMD (AMD) among other manufacturers. However, the company’s poor quarterly performance and relative lack of exposure to the AI ​​boom compared to the likes of Nvidia (NVDA) and AMD have hampered this effort.

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Intel’s stock has fallen 36% over the past 12 months, while AMD’s stock has remained relatively flat. His Nvidia, a leading provider of AI chips, is up as much as 43% of his. And since early 2023, general market sentiment for tech companies has improved, with the Nasdaq up 14% on him, while Intel continues to struggle.

The company’s share price has only risen 9% since January, while AMD has surged 31% and Nvidia has surged 84%.

But Gelsinger is pushing the chip giant into a new era of growth by building new manufacturing facilities in the United States, including a massive $20 billion chip factory in Ohio. Also ahead of Thursday’s earnings call, Intel announced a multi-generational collaboration with chip designer Arm.

US President Joe Biden and Congressman Joyce Beatty (C) join Intel CEO Pat Gelsinger (L ) is listening.  (Photo credit SAUL LOEB/AFP) (Photo by his SAUL LOEB/AFP via Getty Images)

US President Joe Biden and Congressman Joyce Beatty (C) join Intel CEO Pat Gelsinger (L ) is listening. (Photo credit SAUL LOEB/AFP) (Photo by his SAUL LOEB/AFP via Getty Images)

According to Engadget, the move should finally allow Intel to manufacture Arm-based chips for its own licensees.

But Intel’s bigger problem may be a slowdown in the overall PC market. Consumers and businesses hoarded new PCs during the pandemic, but interest rates soared, keeping both categories of customers from spending on new systems.

According to Gartner, worldwide PC shipments in the first quarter of 2023 will drop 30% year-over-year to 55.2 million units. This is his second consecutive quarterly historic decline, according to the research firm.

To Daniel Howley, technical editor at Yahoo Finance.keep up with him @Daniel Howley

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