Intel CEO Pat Gelsinger speaks while holding a new chip, called Gaudi 3, during an event called AI Everywhere in New York, Thursday, Dec. 14, 2023.
Seth Wenig | AP
Intel shares dropped in premarket trading on Friday after the chipmaker issued an outlook for the first quarter of 2024 that lagged analyst forecasts even as results for the latest quarter beat Wall Street estimates.
Here’s how Intel did versus LSEG (formerly Refinitiv) consensus expectations for the quarter ended in December:
- Earnings per share: 54 cents adjusted, vs. 45 cents expected
- Revenue: $15.4 billion vs. $15.15 billion expected
For the first quarter of fiscal 2024, Intel expects earnings per share of 13 cents on between $12.2 billion and $13.2 billion in sales, versus LSEG expectations of 33 cents per share on $14.15 billion of revenue.
Intel CEO Pat Gelsinger said on a call with analysts that the core businesses — PC and server chips — would be at the low end of the the company’s seasonal range in the current quarter, but that overall sales would take a hit because of weakness in subsidiaries including Mobileye and its programmable chip unit, as well as revenue decreases from other businesses the company has spun off or sold.
“The core business we see as healthy,” Gelsinger said. “We see no areas for market share loss and the products are getting stronger.”
Intel posted net income of $2.7 billion, or 63 cents per share, compared to a net loss of $0.7 billion, or 16 cents per share, last year.
With Intel reporting sales growth in the fourth quarter of 10% from $14.04 billion a year earlier, the company breaks a streak of seven quarters with declining revenue. Intel’s gross margin was 40%, down 2.6 percentage points annually.
Intel shares are up over 74% over the past year. The company is the largest semiconductor maker by revenue, according to Gartner, a market research firm, even though its market cap puts it below Nvidia and AMD on Wall Street.
Cloud providers and large tech companies, the big spenders, have been focused on the AI boom, which explains Nvidia’s recent outperformance. In the past, the most important part in a server was the central processor made by Intel. Now, AI servers can have as many as eight Nvidia or AMD graphics processing units (GPUs) attached to one or two Intel CPUs.
“The data center has seen some wallet share shift between CPU and accelerators over the last several quarters,” said Intel CFO David Zinsner on a call with analysts on Thursday.
Intel also continues to focus on a five-year plan implemented by Gelsinger, who took over the chipmaker in 2021. Intel wants to catch up to Taiwan Semiconductor Manufacturing Company in its ability to offer manufacturing services to other companies, while also improving its own branded chips.
“The quarter capped a year of tremendous progress on Intel’s transformation,” Gelsinger said in a statement. Intel said on Thursday that it would restate past results under a new system where Intel has to account for costs related to internal manufacturing of its own chips.
Intel Foundry Services, its business making chips for other companies, remains nascent, with $291 million in revenue, a 63% annual increase.
Intel has been cutting costs through workforce reductions and offloading small parts of its business. In the past year, the company said it would spin off its programmable chip unit, after turning self-driving car subsidiary Mobileye into an independent company in 2022. Zinsner said that Intel had cut $3 billion in costs last year and the company spun off or sold five different business lines.
Intel’s largest division is its Client Computing group, which includes laptop and PC processor chips. The overall PC industry has been in a slump for two years, but recently started showing signs of growth again. Intel reported $8.8 billion in fourth-quarter sales, up 33%.
Gelsinger said that demand for PC chips had “normalized,” and that sales were strong in the gaming and commercial sectors. He added that Intel expects the total PC market to expand this year.
Intel’s second-biggest division, Data Center and AI, saw sales decline 10% to $4 billion. That unit includes server CPUs and GPUs. Intel’s Network and Edge department, which sells parts for carriers and networking, reported $1.5 billion in sales, down 24% from last year.
Zinsner said that Intel expected its Data Center business to decline “double-digit” percentages sequentially in the first quarter versus the fourth quarter.
Intel said it paid $3.1 billion in dividends in 2023.
The Nasdaq MarketSite in New York, June 9, 2023.
Michael Nagle | Bloomberg | Getty Images
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
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