Intel, the leading computer-chip manufacturer, is set to release its second-quarter results after the market closes. However, concerns loom on Wall Street regarding the potential impact of the surging demand for artificial intelligence (AI) chips on Intel’s traditional processors.
Market analysts predict that Intel (ticker: INTC) will report revenue of $12.1 billion and an adjusted loss of 4 cents per share for the June quarter, according to FactSet. The consensus estimate for the current quarter’s revenue stands at $13.2 billion, with an EPS of 16 cents.
Notably, Susquehanna analyst Christopher Rolland recently reaffirmed his Neutral rating for Intel stock, highlighting the risk posed by the growing interest in AI. Rolland expressed apprehension that increased spending on data-center infrastructure might redirect funds towards graphics processing unit (GPU) chips specifically designed for AI applications, thereby potentially reducing resources available for Intel’s server processors.
These concerns were also echoed by Mark Liu, Chairman of Taiwan Semiconductor Manufacturing, who stated that they have observed signs indicating AI-related demand is diverting sales away from traditional server chips.
As of Wednesday, Intel shares had risen 0.8% to $34.36. However, over the past year, the stock has experienced a decline of 14%.
It is clear that Intel faces challenges in navigating the evolving landscape of AI chip demand while maintaining its position in the market. The upcoming release of second-quarter results will provide further insight into how the company is faring in this fast-changing industry.
