Instant Reaction: Intel's Revenue Shatters Wall Street Estimates
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What is the main topic discussed in this episode?
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This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.
Here's how Ian King, who's been covering this company and this sector for many years, put it. Intel delivered a surprisingly strong revenue forecast for the current period, indicating that a surge in data center spending is helping fuel the chip makers' turnaround. The outlook underscores Intel's gains with data center customers, which are clamoring for chips to satisfy demand for AI computing. Sales in that segment soared 59% last quarter, more than double the pace of Intel's overall sales.
Yeah, Chief Executive Officer Liputan saying the CPU is taking off in data centers. All right, let's get to it. Back with us is, of course, Mandeep Singh with our Bloomberg Intelligence team. He oversees tech research here, global tech research for our intelligence team. This looks like a really strong report.
It is, and it's led by something we all expected, data centers. That's where you are seeing the demand. We saw that in Google's results yesterday. And look, the CPU side is something that Intel has had a monopoly over the years. They obviously lost the plot, but now they seem to be coming back. The only thing I'm not very sure about is... how it translates into sustainable demand because everyone else is also making CPUs, whether it's Nvidia, whether it's Google, even the likes of AMDs, they're all focused on CPUs. So Intel is not a monopoly that it used to be. And that's where the sustainability, like expectations going in the quarter were really low. And they did
beat that. So then why are people buying Intels rather than AMDs or NVIDIAs? Is it a commodity, this part of the business?
So if you're just looking for a CPU, Intel still has their foundry where they make the most CPUs, and it makes sense for anybody to go to Intel. If you're looking for systems, which is what Google said, they're selling... TPU systems now. A TPU system has got an accelerator, it's got CPU, it's got networking, it's got everything. That's what all these companies are doing with their data centers now,
is
they're selling a complete system where CPU is one of the building blocks. Intel is not selling you a system. They're just selling you a chip. Kind of says to me, not a great business plan.
Is it? So how do you make sense whether or not I think it's
too
early
to compare Intel to the likes of NVIDIA or what Google told us with their TPU systems. It's still a very early stage opportunity for Intel on the data center side. Again, expectations were really rock bottom. So they came out, they beat that data center number by 700 million. Great. But if I look at the sustainability of what Google plans to do or what NVIDIA plans to do, Intel is not in that category yet. And that's where you need for them to execute much better on the data center side in terms of having a GPU, having more on the networking side, having a systems play, which is what we are hearing from AMD, by the way. That's what AMD is after. That's what Broadcom is after. So I'm not... ready to put Intel in that basket of companies that have systems opportunities.
But they need
to get there?
I think it's a big challenge. I mean, you have to remember, Intel underperformed for a period of five, six years where they just had things going down.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–5:22
2
Why did Intel’s Q3 revenue forecast beat Wall Street expectations?
5:22–7:53
3
How is booming data‑center spending driving Intel’s turnaround?
7:53–9:33
4
What makes Intel’s CPUs still attractive versus AMD and NVIDIA?
9:33–11:49
5
Is Intel’s focus on chip sales alone a sustainable business model?
11:49–14:17
6
How does Intel’s foundry capacity affect its ability to meet demand?
14:17–16:40
7
What role does increased CapEx play in Intel’s growth strategy?
16:40–18:51
Speakers
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