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Intel (INTC) is set to report its Q3 earnings after the bell on Thursday as the chip giant continues to contend with a troubled turnaround that’s sent its stock plummeting 52% year to date at a time when shares of rival Nvidia are soaring 154%.
Intel is also dealing with the fallout from a Reuters report detailing missteps at the firm, including issues with its 18A chip manufacturing process and the dissolution of a potential deal with Waymo to provide chips to the self-driving car company to save cash.
For the quarter, Intel is expected to report a loss per share of $0.03 on revenue of $13 billion. That’s down from the earnings of $0.41 per share and revenue of $14.1 billion the company saw in the same quarter last year.
Revenue for the company’s Client Computing segment, which deals with sales of chips for laptops and desktops, is expected to decline 5% to $7.4 billion versus $7.8 billion in the same quarter last year. Revenue for Intel’s Foundry business, which is responsible for making chips for Intel and for third-party customers, is also expected to drop some 6% to $4.4 billion versus $4.7 billion in Q3 2023.
The company is, however, expected to report growth in its data center and AI segment, with revenue set to climb to $3.1 billion from $3 billion last year. It’s not exactly an earth-shattering improvement, but it’s something.
Intel also had some good news in the quarter. In September, the company announced it had entered into an agreement to build custom chips for Amazon Web Services (AMZN). Microsoft (MSFT) also previously entered into an agreement for Intel to build its custom chips. But the company will need to add a slew of additional customers to ensure its foundry business is a success.
Intel’s Foundry services have run into trouble before. According to a separate Reuters report, Broadcom was evaluating using Intel’s manufacturing processes for its own chips, but test runs of the semiconductors fell short.
Intel has also struggled amid a prolonged slump in PC chip sales that’s only beginning to improve and increased competition from AMD (AMD). But there’s hope on the horizon, as PC sales are beginning to pick up again, though they dipped slightly in Q3, according to Gartner.
The company also launched its second-generation Core Ultra chips for laptops, which are designed to handle AI tasks and better compete with Qualcomm’s (QCOM) own Arm-based chips in terms of battery life. Intel’s laptop chips have been energy hogs for years.
It’s part of the reason Apple (AAPL) decided to ditch the company’s processors in favor of designing its own Arm-based chips. Since then, Apple has managed to squeeze out more power and battery life from its systems than ever before.