Intel announces 9% YoY growth in Q1 led by edge, compute, and artificial intelligence products

Photo by Pok Rie

Intel Corporation, which wants to become the market leader in AI hardware, released its first-quarter profits today using its new financial structuring methodology.

The business revealed today that its first-quarter revenue of $12.7 billion represented a 9% YoY increase. It projects $12.5 billion to $13.5 billion in sales for the second quarter of 2024.

The company's Q2 estimate pushed stocks down 8% even though Q1 exceeded analysts' expectations, as $13.63 billion was not projected for the upcoming quarter. With $12.72 billion in revenue, it generated $0.18 in adjusted profits per share (EPS).

During the earnings call today, CEO Pat Gelsinger stated, "We delivered solid Q1 results." He stated that Intel believes Q1 to be "the bottom," with profitability increasing for the year and that the results were "moderately weaker than what we anticipated."

 Yet, Intel executives praised the company's expanding artificial intelligence capabilities. With its new Gaudi 3 AI accelerator, which it claims will give an average of 50% quicker inference and 40% more inference power efficiency than Nvidia H1001 on leading-gen AI models, it is notably taking on rivals Nvidia and AMD. Additionally, Intel is placing more emphasis on its line of AI PCs.

"We're participating in all of our segments; AI is a hot market," Gelsinger stated. "AI is being delivered everywhere."

Product group growth and a sharp decrease at Intel Foundry

Intel recently revealed a reorganization, with "Intel Products" now accounting for income from its client computing group, data center, artificial intelligence, and network and edge divisions. The semiconductor business segment of Intel called Foundry is now referred to as "Intel Foundry." Meanwhile, its software company Mobileye, semiconductor company Altera, and other operations fall under the new "All Other" category.

Intel Products sold by the corporation brought in $11.9 billion, a 17% YoY increase. Its client computing goods had a 31% YoY increase to $7.5 billion. Its network and edge segment rose to $1.4 billion (8% YoY), and its data center and AI products reached $3 billion (5% YoY).

In sharp contrast, revenue from "Other" sources was $775 million, down 46% year over year. Additionally, the company's Intel Foundry division reported $4.4 billion in revenue for the quarter, a 10% YoY decrease.

But Gelsinger predicted that "we'll be seeing improvement in Intel Foundry every quarter from here until the end of the decade."

In the end, Gelsinger stated, "We are encouraged by our progress, but far from satisfied."

AI computers offer a "Centrino moment."

Intel is producing more AI PCs than initially projected as it keeps upping the pace of development. Over 5 million AI PCs had been supplied by the corporation as of the end of the first quarter, following the debut of its Intel Core Ultra CPUs in December 2023. By the end of 2024, the business hopes to surpass its previous projection of 40 million AI PCs.

Gelsinger stated, "We are defining and leading the AI PC category," adding that successive quadruple doubling of units is anticipated in Q2. "This product is in demand. All we've done is keep upgrading our AI PC.

He said that the company is "trying to catch up" and increase its capability for wafer-level assembly because there have been limitations on the back end related to wafer levels.

AI PCs are a new category with a plethora of expanding use cases, according to Gelsinger. He referred to it as a "Centrino moment" and claimed that every independent software vendor (ISV) is "AI-ifying their apps" (referring to Intel's Wi-Fi and WiMAX wireless computer networking adapters).

"Over time, every PC will transform into an AI PC," he declared. "AI PC will allow us to benefit gradually."

On the back end, Intel expects to release Gaudi 3 and Falcon Shores, the company's first GPU architecture created just for AI applications, next year.

"We are among the two or three companies globally that possess the ability to sustain the advancement of next-generation chip technologies," Gelsinger declared.

The open software Intel Edge Platform, which the tech giant also just unveiled, assists businesses in creating, implementing, and overseeing edge and AI applications at scale. Its Open Platform for Enterprise AI additionally seeks to leverage retrieval-augmented generation (RAG) to expedite the adoption of Gen AI.