Intel Corp.’s recent forecast for the first quarter has left investors feeling a bit like they’ve been stood up on a date. The chip maker’s data-center business is expected to take another hit, with a double-digit decline looming on the horizon. This news comes as a disappointment, especially since Intel has yet to make the most of its AI opportunity. The company’s Chief Financial Officer, Dave Zinsner, revealed that there’s a $2 billion pipeline for its accelerator product line, code-named Gaudi, which is set to rival Nvidia. Despite this, Marbel Lopez, principal analyst at Lopez Research, predicts that Intel’s AI story won’t really kick in until the third quarter.
Gene Munster, managing partner at Deep Water Asset Management, didn’t mince words when he expressed his skepticism about Intel’s AI prospects, telling CNBC that he doubts Intel will achieve the significant boost from AI that it’s banking on. This raises the question: Could Intel be reaching for a brass ring that’s just out of its grasp? It seems that Intel’s AI ambitions may be grand, but turning them into a tangible reality is proving to be a challenge.
But it’s not all doom and gloom for Intel. The PC space could offer a glimmer of hope, with the company eyeing the potential for new, AI-ready PCs with Intel chips that can process AI queries directly on the device, bypassing the need for the cloud. This strategy is expected to launch in the second quarter and gain momentum through the latter part of 2024. It’s a reminder that while Intel’s AI dreams may be a bit deflated at the moment, there are still other avenues for the company to explore.
Investors might have jumped the gun on Intel’s AI narrative, but the bigger picture remains clear: the allure of AI is strong, and the potential it holds is undeniable. However, the reality is that not every company has cracked the AI code just yet. As we wait for Intel’s AI journey to pick up speed, it’s a timely reminder that while hope and promise surround the AI landscape, cold, hard numbers and results are what truly matter. For now, it looks like Intel’s AI ambitions will have to weather a storm of skepticism and uncertainty, but the potential for a brighter horizon still remains on the distant horizon.
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