Investors who bought shares of Intel (INTC) after the White House invested in the company gained up to 207.5%. Last night, however, shareholders risk losing some of those gains. The company posted weak earnings per share and issued a disappointing outlook.
Intel posted non-GAAP EPS of $0.15 while revenue fell by 3.9% Y/Y to $13.7 billion. On a GAAP measure, however, it lost $0.21 a share. $0.12 per share is due to share-based compensation. Client Computing Group contributed to $8.19 billion in revenue. Data Center and AI revenue beat expectations, with $4.74 billion in revenue.
In Q1, the struggling PC chip producer is forecasting revenue of $11.7 billion to $12.7 billion. However, an ongoing server CPU shortage will mean that the available supply will be at the lowest level this quarter. Intel is expecting supply to rebound in the second quarter and afterward.
Disappointment
Intel has no real income as revenue falls. Even worse is the lack of details from Intel on the 18A manufacturing process. The company did not clarify if it won any major customer orders.
Pressure on the Government and Nvidia
The government clawed back the nearly $11 billion from the CHIPS Act. It repurposed those funds to invest in Intel, taking an equity position. Nvidia (NVDA) invested $5 billion in common stock, paying $23.28 a share.
Both parties have a huge paper profit on Intel. But if Intel stock falls steadily, its paper gains will shrink. The pressure is on the two parties to reconsider their investment.
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