Intel forecasts revenue above expectations on strong data center demand

Credit: REUTERS/Stephen Nellis

Adds segement revenue, background

April 22 (Reuters) - Chipmaker Intel Corp INTC.O forecast second-quarter revenue above Wall Street targets on Thursday, betting on demand for its new generation of processors for data centers and PCs as cloud-based services become an integral part of businesses.

The world's biggest maker of central processors has been aiming to cater to the needs of the modern data centers, where different processors perform specialized tasks and had recently launched a processor dubbed "Ice Lake".

With its dual-tracked strategy to manufacture, outsource and build its own foundry for chips, Intel aims to revamp its business model, while keeping a strong hold on its manufacturing.

This could tilt the technological balance of power back to the United States and Europe and away from Asia-centric chip manufacturing given tensions with China.

Intel's strategy could have wide-ranging competitive and political implications in the long term, analysts have said.

The company expects second-quarter revenue of about $17.8 billion, compared to analysts' average estimate of $17.59 billion, according to IBES data from Refinitiv.

Revenue from Intel's higher-margin data center business fell 20% to $5.6 billion in the first quarter, while analysts on average had expected revenue of $5.89 billion, according to FactSet.

(Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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