Amid strong demand in major markets such as Japan, Europe, and North America, this world's largest auto manufacturer has increased its share buyback program to 1.2 trillion yen ($8.3 billion). $Intel (INTC.US)$ Continuing to be deeply immersed in crisis, the market generally has a pessimistic expectation that the company will announce the largest quarterly revenue decline in five quarters, which may portend further erosion of the datacenter and PC market share of this once iconic American chip manufacturer.

Currently, shareholders have turned their attention to CEO Pat Gelsinger's efforts to rescue the company's lost market leadership position, as losses in its chip foundry business continue to increase. Additionally, after a series of missteps, including giving up on investing in OpenAI, Intel has so far failed to ride the artificial intelligence-driven chip boom.

Intel will announce its latest quarterly performance in the post-market trading on October 31st US Eastern Time. According to statistics, Wall Street expects Intel's revenue to drop by 8% to $13.02 billion. Investors are looking forward to Gelsinger clearly outlining his plans for the company's latest manufacturing technology investments.

Losing investors' trust.

In August of this year, Intel released a disastrous quarterly financial report, which has raised some doubts among investors about Gelsinger's strategy to revitalize this troubled chip manufacturer.

Rosenblatt Securities analyst Hans Mosesmann stated that Intel investors currently have two questions about the company: 'Can the company's issues be resolved? Who will resolve the issues?'

Gelsinger, who served as CEO of Intel in 2021, has announced a layoff plan, suspended dividends, and reached a new chip manufacturing agreement with existing customers.$Amazon (AMZN.US)$One of the latest major transactions produced by the company's 18A technology is a new chip manufacturing agreement reached with existing customers.

However, this has failed to reassure shareholders, with the stock plummeting over 50% year-to-date, and the market cap dropping below $100 billion.

While some investors are seeking the latest progress from Intel in establishing advanced 18A manufacturing technology (set to launch in 2025), others are hoping the company will divest its foundry business to focus on chip design business.

Daniel Morgan, portfolio manager at Synovus Trust, said: "Many people welcome (Intel) selling its foundry business." Synovus Trust holds $Intel (INTC.US)$ and $Advanced Micro Devices (AMD.US)$Stocks.

According to Visible ALPHA's data, due to the capital-intensive process of operating and expanding wafer fabs, the company's foundry business is expected to incur an operating loss of $2.55 billion this quarter.

Ryuta Makino, an analyst at Gabelli Funds who holds Intel stocks, said, "The foundry business is a major reason for Intel's weak gross margin."

According to general expectations, this chip maker's adjusted gross margin is expected to decrease by over 7 percentage points to 37.9%.

Weak PC business remains.

In addition, Intel's profit margin may also face pressure from the increasing production of AI PC chips - the company has been betting that this will drive a revival in demand in the PC sector.

But this revival has not materialized yet, with the market expecting Intel's PC department sales to decline by more than 6%.

The winner in the PC market is now AMD. According to data, the company's PC chip revenue surged by 29% year-on-year in the third quarter, exceeding the market's expected growth of 18%.

AMD is also nibbling at Intel's server market share. AMD's datacenter department revenue was $3.5 billion in the third quarter, more than doubling from the same period last year, slightly higher than market expectations. In contrast, Intel's datacenter revenue is expected to decline by about 17%, marking the tenth consecutive quarter of decline.

While Intel still holds a significant share in the server CPU market, demand has been shifting towards AI GPU, where Intel has almost no influence.

Since September, about half of the 31 analysts have lowered their revenue expectations for Intel. Some investors believe that the market's pessimistic expectations have already left the company unable to deliver an even worse report.

Makino of Gabelli Funds stated: 'If there is another negative surprise, I would be very surprised, as expectations have been completely reset.'

Wedbush analysts stated that they "expect Intel to have an unpleasant Halloween." The firm pointed out that the PC market has slowed down, and in the server market, Intel is also at a disadvantage compared to its competitor AMD.

Wedbush is skeptical about whether Intel can meet or exceed market expectations. The firm stated that the only hope for Intel's third-quarter performance is "that its (latest) guidance is too conservative, even the negative impact on multiple businesses is not enough to result in underperformance."

Editor/Rocky