The pandemic had led to a slump in the PC market, resulting in excess inventories as consumers already purchased the machines they needed during the lockdowns. However, the oversupply has begun to diminish, with PC shipments declining just 11.5% in the June quarter, compared to a drastic 30% decline in each of the previous two quarters.
The improving PC market prompted Intel to predict higher profits in the third quarter. Though its margins had experienced a significant decline in recent quarters, Intel expects profit margins to improve in the latter half of the year.
The success of Intel can be largely attributed to desktop sales, which rebounded significantly from a near-record low in the previous quarter. This remarkable resurgence propelled Intel’s market value by nearly $9 billion.
Intel’s data center and artificial intelligence sales did experience a 15% decline to $4 billion from $4.7 billion in the year-ago quarter. The focus on chips suitable for AI computing in the cloud has impacted Intel’s share in the server chip market.
Nevertheless, the company is actively exploring new avenues, such as collaborating with Swedish telecommunications equipment maker Ericsson (ERICb.ST) to develop a chip using advanced manufacturing technology, aimed at enabling high-performance computing and artificial intelligence.
Intel’s commitment to the AI domain is evident through its foundry business, which reported increased revenue due to “advanced layout,” a process that combines parts of chips made by other companies to create more powerful chips.
Despite challenges, Intel’s results managed to beat Wall Street estimates, demonstrating the company’s ability to navigate a complex market landscape. Its share prices have surged about 30% this year, anticipating a recovery in the industry. As Intel continues to innovate and diversify its offerings, it remains a significant player in the technology sector, looking forward to a promising future.
