Wedbush Analyst Says 'Bit Surprised' After Intel's First-Quarter Guidance Falls Short By Over $1B

Intel Corporation‘s INTC first-quarter guidance for 2024 has failed to meet revenue expectations by more than $1 billion, catching analysts off guard.

What Happened: Matt Bryson, Senior Vice President at Wedbush Securities, in conversation with Yahoo Finance Live on Friday, analyzed the results and said he is “a bit surprised” at the extent of the guidance shortfall.

Bryson argued that Intel’s decision to overship and maintain an excess inventory in Q4 resulted in a backlog that the company is now trying to manage. This situation has led to the current guidance shortfall, he explained.

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According to Bryson, data from Taiwan indicated a slowdown in PC production in the fourth quarter. He posited that Intel’s overshipping and a glut of inventory in Q4 have resulted in a current backlog, contributing to this disappointing forecast.

Despite the initial dip, Bryson remained hopeful for Intel’s future. He acknowledged that the extraordinary demand during the COVID-19 era led to the present cooldown. However, he anticipates “a pretty nice refresh starting towards the end of 2024 into 2025,” with the conclusion of a 3-4 year corporate refresh cycle and the introduction of new PC innovations.

Why It Matters: Intel reported fourth-quarter revenue of $15.4 billion, which was up 10% year-over-year. The revenue total came in ahead of a Street consensus estimate of $15.16 billion according to data from Benzinga Pro. The company is guiding for first-quarter revenue to be in the range of $12.2 billion to $13.2 billion, which is shy of a Street estimate of $14.2 billion

The Q1 shortfall aligns with the prediction of BofA analyst Vivek Arya, who expected a first-quarter miss. Arya’s forecast of multiple headwinds, including a cut in Mobileye outlook, PC seasonality, weak industrial/auto, networking, and muted enterprise, seems to have materialized.

Meanwhile, the U.S. National Science Foundation, in collaboration with 10 federal agencies and 25 private and nonprofit organizations, has initiated the National Artificial Intelligence Research Resource (NAIRR) pilot. Prominent private and nonprofit partners contributing to the project include Intel, Amazon Web Services (AWS), Palantir Technologies Inc., NVIDIA Corporation, and Microsoft Corporation, among others.

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