Intel Surges on AI Demand, Beats Forecasts

Intel's shares saw a substantial increase on Thursday following the announcement of strong quarterly financial results and positive future projections. The US chipmaker reported revenue of $13.6bn for the quarter ending March, marking a 7% year-on-year growth and exceeding Wall Street's expectations of $12.4bn. This surge led to a 15% rise in after-hours trading.

The company anticipates revenue between $13.8bn and $14.8bn for the current quarter, also surpassing average analyst estimates. CEO Lip-Bu Tan attributed this success to a wave of AI-driven demand that necessitates Intel's CPUs and advanced packaging solutions. Big Tech companies are heavily investing in AI data centers, where Intel supplies crucial central processing units.

Intel's data center and AI products generated $5.1bn in revenue during the first quarter, significantly outperforming expectations. A company spokesperson noted that the shift towards AI model inference is driving a proportional increase in the number of CPUs required to complement each GPU. Despite a reported net loss of $3.7bn due to a goodwill writedown, the adjusted net income was $1.5bn.

Furthermore, Intel's chip foundry business reported $5.4bn in revenue, exceeding analyst expectations. While this revenue primarily comes from Intel manufacturing its own products, the company aims to secure external customers in the latter half of the current year. Elon Musk expressed confidence in Intel's upcoming 14A manufacturing process, planning to utilize it for his chipmaking facility, potentially making him Intel's first major customer for this advanced technology.