Intel published results last week showing how much AI is changing it too. Third-quarter revenue reached $16.5 billion, up 21%, and the data center and AI segment jumped 78% to $7.3 billion. According to CFO David Zinsner, it is the strongest data center growth in 15 years.
Demand for Xeon
CEO Lip-Bu Tan said demand for CPUs remains strong, and that his immediate priority is to increase supply to meet "extraordinary demand" for Xeon server processors. As AI data centers grow, they need not only GPUs but also regular processors that manage them.
Why the stock fell
But the PC segment fell 5% to $8.1 billion, and Zinsner expects the slowdown to last at least through the middle of next year. Intel forecasts fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of 25 cents per share, below expectations, and the stock fell more than 16% after hours. Net income fell 18% to $3.3 billion.
The Israeli angle
Intel is the largest private employer in Israeli tech, with fabs in Kiryat Gat and R&D centers in Haifa, Jerusalem and Petah Tikva. This quarter the company also completed a $23 billion stock offering and announced the purchase of Israel's Classiq. Data center growth is good news for employees in Israel, but the PC slowdown, a field where Israel leads development, is a warning sign.
