Intel Q4 2023 Earnings: Data Center and AI (DCAI) Segment Fails to Deliver on Hype

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Intel has now announced its earnings for the fourth quarter of 2023, broadly beating consensus expectations regarding its top-line and bottom-line metrics.

Intel (NASDAQ: INTC) Earnings Release for the Fourth Quarter of 2023

For the three months that ended on the 31st of December 2023, Intel reported $15.40 billion in non-GAAP revenue, exceeding consensus expectations of $15.17 billion.

Before looking at the actual performance of Intel’s business units during the quarter, here are consensus analyst expectations for some of the company’s key business segments:








Client Computing Group (CCG)

Data Center and AI (DCAI)

Intel Foundry Service (IFS)

Here is the actual performance of Intel’s business segments in Q4 2023:

During Q4 2023, IFS recorded the highest growth, while NEX remained the laggard with a growth of -31 percent.

The following excerpt from the company’s earnings release provides supplemental platform revenue information:

Finally, Intel earned $0.54 in EPS (non-GAAP), beating consensus expectations of $0.45. Intel had guided to a non-GAAP EPS of $0.44 while announcing its earnings for the third quarter of 2023.

Here is the company’s guidance for the first quarter of 2024:

Investors have reacted negatively to Intel’s latest earnings release, with the stock currently down around 8 percent in after-hours trading. The miss on DCAI’s consensus revenue expectations is currently taking its toll.

Earnings Context

Intel’s CEO, Pat Gelsinger, had announced at the company’s last earnings call that the company’s IFS division has contracted with two as yet unnamed customers and that negotiations were ongoing with a third client. It remains to be seen if Intel will announce the identity of these customers at today’s earnings call.

Intel is hoping that its “Core Ultra” lineup of CPUs will boost the revenue of the CCG segment in 2024. These chips include a Neural Processing Unit (NPU), which allows certain AI applications to run locally instead of relying on cloud connectivity.

Of course, the prime focus of investors remains on the chip manufacturer’s DCAI unit. In December, the company unveiled its Gaudi3 accelerator to power generative AI applications. Built on TSMC’s 5nm node, the AI accelerator is reportedly faster than NVIDIA’s H100 AI-focused GPUs.

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