Intel CEO Pat Gelsinger expressed confidence in the company’s turnaround despite a steep 11% drop in the stock following a less than stellar first quarter outlook. The company expects to overcome sales and profit challenges in the data center and Mobileye businesses through new chip launches to support AI workloads and hardware. Gelsinger assured investors that Intel is on track to ship 40 million AI PCs in 2024 and that the company’s planned chip launches for the year will proceed as scheduled.
However, Wall Street remains unconvinced, with Citi analyst Christopher Danely pointing out that Intel’s growth businesses are not growing and are actually contracting. Despite Gelsinger’s optimism, analysts like JP Morgan’s Harlan Sur have an underweight rating on Intel’s stock, with the expectation that the next 12 months will be challenging for the company, especially with the launch of significant products over three new manufacturing technology nodes. Overall, despite some positive signs in the earnings report, Wall Street is taking a “show-me” approach to investing in Intel.
The company itself showcased several AI-focused products and services recently, including an artificial intelligence chip for generative AI software and a new Core Ultra processor targeting the emerging AI PC market. Gelsinger also shared that he has a line of sight into $10 billion in orders for Intel’s new foundry business, which is expected to become a significant money-maker for the company starting in 2025. Despite Intel making strides in strategic areas, the company has yet to convince the market of its comeback story.
