By Zaheer Kachwala and Max A. Cherney
April 23 (Reuters) - Intel forecast second-quarter revenue above Wall Street expectations on Thursday, underscoring booming demand for the chipmaker's server chips used in artificial-intelligence data centers.
Intel shares jumped roughly 12% in extended trading on Thursday.
The company expects revenue of between $13.8 billion and $14.8 billion, compared with an estimate of $13.07 billion, according to data compiled by LSEG.
After years of management blunders left
the former icon of chipmaking without a meaningful foothold in the booming artificial-intelligence industry, CEO Lip-Bu Tan put a revival plan in place to shore up Intel's balance sheet through asset sales and layoffs.
Tan also secured large investments and struck deals with the U.S. government, SoftBank and Nvidia, giving Intel much-needed fuel to put into its manufacturing operations and inspire strong investor confidence in the firm's longer-term growth.
While Intel missed out on the early years of the AI boom, a new opportunity in the form of advanced central processing units (CPUs) has emerged as cloud providers shift from training models to deploying them.
INTEL'S CPU OPPORTUNITY
"The CPU (is) having a renaissance here," finance chief Dave Zinsner said in an interview with Reuters. "We're starting to be a meaningful beneficiary of the AI investments that are happening."
While graphic processing units (GPUs) are used to process large-scale mathematical operations required to generate content, CPUs are better suited to handle workloads done by autonomous AI agents with reasoning capabilities.
However, Intel's ability to meet demand still depends on whether the company can continue to manufacture its processors at scale and without bottlenecks and supply issues.
Intel on Wednesday landed a win for its manufacturing business, securing Elon Musk's Tesla as its first major customer for the next-generation 14A process to make chips at its Terafab project, an advanced AI chip complex Musk has envisioned in Austin, Texas.
Intel earlier this month expanded its AI CPU partnership with Alphabet's Google, and joined Musk's Terafab AI chip complex project with SpaceX and Tesla to make processors powering robotics and data centers.
First-quarter revenue came in at $13.58 billion, beating estimates of $12.42 billion.
Revenue in the company's data center and AI segment came in at $5.1 billion, compared with estimates of $4.41 billion.
Intel's shares have jumped over 80% so far this year, and nearly 48% in April, as investors bet heavily on the CPU - the kind of processor Intel has championed for decades and built its business around.
Competition in the CPU space, however, remains high, as rivals Nvidia, Advanced Micro Devices, and Arm also eye the market and roll out products to get ahead.
Intel reported a first-quarter loss per share of 73 cents as it incurred more than $4 billion in restructuring charges. On an adjusted basis, the company earned 29 cents per share, beating the estimate of 1 cent.
(Reporting by Zaheer Kachwala in Bengaluru and Max A. Cherney and Stephen Nellis in San Francisco; Editing by Pooja Desai and Matthew Lewis)
