Intel results to show if supply chain issues are dimming its AI ambitions

Intel investors on Thursday will focus on its efforts to sort out supply chain issues that have limited the company's ability to ramp up chip production to meet rising demand from businesses adopting AI-related services.

Intel ‌has warned ⁠that supply ⁠constraints for its server chips that are used alongside ​graphics processors made by companies such as Nvidia will be most ​acute in the first quarter before easing in the second.

Intel is expected to report a 1.9% ​decline in first-quarter revenue to $12.42 ⁠billion and ‌a near 90% drop in adjusted ​earnings per ​share, according to data compiled by ⁠LSEG.


The company's data center and AI segment is expected to grow 6.8% to $4.41 billion.

​Intel earlier this month expanded its AI CPU partnership with Google and joined Elon Musk's Terafab AI chip complex project to make processors.

"Rising demand for CPUs in AI data centers gives the ‌company a steadier revenue lifeline that's less dependent on the consumer PC cycle," eMarketer ​analyst Jacob ​Bourne said.

Investors ⁠will also pay attention to the yields, or the number of good chips per silicon wafer, of Intel's ​18A manufacturing process.

"For Intel to make an outsized bid here, their 18A yield improvement has to be ... better than market expectations," said Ryuta Makino, analyst at Intel investor Gabelli Funds.