The turning point in the chip industry may really be here. Because of the recovery in the personal computer (PC) market, Pat Gelsinger, CEO of chip giant Intel, expects the company to achieve guidance for the third quarter that exceeds Wall Street's expectations.
At a technology conference held by Deutsche Bank on Thursday, August 31, local time, Gelsinger said that currently, we can say that we are above the midpoint of the guidance for the third quarter, so we feel good about the third quarter. Overall, as we look at the current environment, it is clear that we have gone through a strong recession-to-boom cycle.
Gelsinger emphasized Intel's ambition to achieve reform and regain its dominant position in the industry. He said that the company's transformation has been underway for two and a half years, and the situation is in line with his previous expectations, so there is no need for external doubts about Intel's ability to achieve its goals.
Gelsinger admitted that Nvidia's IT chip business is doing well, but believes that Intel will soon start winning orders in the AI accelerator chip market.
After Gelsinger's comments on the positive performance in the third quarter, Intel's stock price rose during Thursday's trading, reversing the decline of nearly 0.7% in early trading. At midday, it reached a new daily high, rising by about 3% during the day, and ultimately closed up by about 1.8%, reaching a new closing high since August 14, approaching the high since August 1 created on August 14, and has risen for five consecutive days.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/22094ae4-b561-486c-98cb-6e9feebc7c17.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/22094ae4-b561-486c-98cb-6e9feebc7c17.jpeg"/>
Wall Street CN previously mentioned that in July, Intel announced a 15% year-on-year decline in revenue in the second quarter of this year, and non-GAAP adjusted EPS profit fell by 54%. However, the second-quarter revenue was higher than market expectations, and EPS returned to profit, although it was still negative as expected by analysts, both revenue and net profit were higher than the high end of the company's own guidance.
Moreover, at that time, Intel predicted that the adjusted revenue for the third quarter would be between 12.9 billion and 13.9 billion US dollars, and the midpoint was higher than the analysts' expectation of 13.28 billion US dollars; the gross profit margin for the third quarter was expected to be 43%, higher than the market expectation of 41%.
During the second-quarter earnings conference call, Gelsinger said that Intel's investment in AI accelerators has exceeded $1 billion, and in the second quarter alone, the scale of this product line has expanded sixfold.
In addition to its own AI accelerator product Gaudi2, Intel can also benefit from the surge in demand for AI accelerators through its foundry business, providing customized AI chips for large cloud companies such as Alphabet and Amazon.
Analysts believe that Intel's guidance for the third quarter exceeding expectations indicates that the demand for PC components is improving and the long-awaited recovery in the industry may have begun.
This guidance also indicates that Intel has emerged from the slump in PC chip demand that has hit its business hard. The company's management had promised improvement in the second half of the year, and now investors are seeing new evidence of that.

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In July, Intel reported a surprise return to earnings in the second quarter, with the median revenue guidance for the third quarter higher than analysts expected. Intel CEO said on Thursday, the current performance has been above the midpoint of the three quarter guidance.

Optimistic about the recovery of the PC market, Intel's CEO expects Q3 to exceed expectations, causing the stock price to briefly surge by 3%.