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Published on
January 31, 2025
3 min read
Intel Q4 Earnings Surpass Analyst Estimates Amidst Shrinking Market Share
Intel Q4 earnings have surpassed analyst projections, Yahoo Finance has reported. Stocks of the semiconductor manufacturer gained 2.9% in premarket trading on January 30 following the strong performance. Even with the positive earnings, Intel cautioned that it’s still working towards becoming more competitive.
No Quick Fixes
Intel’s Q4 earnings report shows that the company’s sales revenue reached $14.3 billion. Executives in the company attributed the spike in sales to high orders from Asia as they sought to get Intel chips ahead of US tariffs. However, the company expects its first-quarter earnings to fall short of analyst estimates due to loss of market share and weaker demand for Intel AI chips.
Intel’s Q4 revenue growth has attracted positive reactions from investors. The realistic tone set by the interim CEOs in the chip maker has also struck a positive code with investors.
“There are no quick fixes. As co-CEOs, you can expect us to be very straightforward and direct. We only make commitments we are confident we can deliver,” Intel Interim co-CEO and Chief Product Officer Michelle Johnston Holthaus said during the earnings call.
Holthaus and her co-CEO said they’ve focused on improving the company’s manufacturing process and products in order to compete in the chip market. The company is also working to improve its finances.
The semiconductor giant expects its quarter-one revenues to range between $11.7 billion and $12.7 billion. This is less than the $12.85 estimated by analysts. Intel’s conservative estimates reflect the fierce competition it continues to face in the chip industry and reducing demand for its products. The company announced a loss of 3 cents per share in quarter four. Intel shares have lost over 50% of their value over the last year.
Leadership Wrangles
Although Intel’s Q4 earnings were better than expected, they are the lowest that the company has recorded in more than a decade. Intel’s declining revenues have been attributed to the leadership challenges that it experienced. In December 2024, the Intel board pushed former CEO Pat Gelsinger out after his high-cost turnaround plan failed.
Initially, investors supported his plan to restore the company’s dominance in manufacturing. But they deserted the company when its spending on equipment, new plant and research strained their finances. Gelsinger addressed the spending issue partly by cutting 16,000 jobs. The company’s competitors exploited the AI shift in the industry.
This further eroded the big market share that Intel once held. Intel has been, until recently, the world’s biggest chip manufacturer. To restore its top-line growth, the company has to shift to AI accelerator production to improve its chips.
The company did not update analysts on the progress it has made in the search of a new CEO. The incoming CEO will be expected to make key decisions, including the option of breaking up Intel functions. Intel rivals are already looking to bid for the entire company or parts of it.
Shrinking Market Share
Intel is facing stiff competition from leading semiconductor manufacturers like Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia, and Advanced Micro Devices (AMD). Nvidia is currently generating over $100 billion annually from the sale of accelerator chips.
To date, the company has not been able to manufacture a viable alternative to the accelerator chips produced by Nvidia. Holthaus told analysts that although the company’s new PC chips compare favorably with those produced by rivals, Intel has to work towards providing better chips for data centers.
“We’re fighting really hard to close the gap. We certainly have more work to do,” she said.
AMD is taking over Intel’s server processor and personal computer market share while other firms that use smartphone-derived processors are tapping into Intel’s largest market. Intel’s competition landscape has been complicated further by the fact that TSMC has taken on its major strength by offering outsourced production services to rivals.
