Intel Corporation (NASDAQ:INTC) fell short of revenue estimates, but topped earnings per share estimates with its first quarter financials. But, Intel remains confident of its ongoing revival and claims it is on track to catch up to its peers, including Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and even the mightly AI chip leader Nvidia Corporation (NASDAQ:NVDA).

First Quarter Highlights

For the March quarter, Intel reported revenue rose 9% YoY to $12.7 billion, slightly below $12.78 billion that LSEG expected. Intel narrowed its net loss from last year's comparable quarter when it lost $2.8 billion, or 66 cents per share to $400 million, or 9 cents per share. Adjusted earnings amounted to 18 cents, surpassing LSEG's estimate of 14 cents.

This was Intel's first report since revealing it had established its chip manufacturing business, Intel Foundry, a separate line item with its own costs and sales. Intel Foundry posted a revenue of $4.4 billion, which Intel noted was a 10% YoY drop, while operating loss amounted to $2.5 billion.

Client Computing sales, Intel's biggest business which is making chips for PCs and laptops, reported revenue rose 31% YoY to $7.5 billion.

Data Center and AI business, which include making central processors for servers, reported revenue rose 5% YoY to $3 billion, while Intel continues to fight for market share against the industry leader, Nvidia.

Intel is working hard to stay relevant in a highly competitive environment.

Intel is investing heavily in AI. Earlier in April, it revealed it will be releasing a new AI processor for servers. Named Gaudi 3, this will be Intel's attempt to go after Nvidia. Intel plans to challenge Nvidia or more precisely, its popular graphic processing units. With Gaudi 3, Intel promised a 50% on average better inference and 40% on average better power efficiency compared to Nvidia-made GPUs. Intel expects its newest offering to bring in more than $500 million in sales during the second half of the year.

Intel claims it's on track to close the gap despite providing a lackluster second quarter guidance.

For the current quarter, Intel guided for earnings of 10 cents per share which was significantly below 25 cents per share that analysts on average expected, while revenue of $13 billion at midpoint was below sales of $13.57 billion that analysts expected.

However, CEO Pat Gelsinger confirmed that Intel remains on track to close the technology gap that is the result of more than a decade of underinvestment and catch up by 2026.

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