Shares of Intel Corp (NASDAQ:) fell by 4.5% to trade at $36.28 on Tuesday, following remarks by the company’s CFO David Zinsner about a slower-than-expected recovery in the demand for data center chips. The announcement came during a meeting with analysts tied to the Intel Innovation customer event in San Jose.
Zinsner revealed that the inventory of data center processors is taking longer to clear than it did for the company’s PC processor business, signaling a more delayed recovery in the data center sector. He also projected an “inventory digestion” phase for Intel during both, the third and likely fourth quarter of this year, before any positive turnaround in the data center business can be expected.
The CFO also noted a decline in the data center business in the September quarter, compared to previous quarters. This news led to some sobering reflections on the state of the chip company, resulting in a dip in Intel’s stock.
In contrast to these challenges, earlier on Tuesday, Intel’s CEO Pat Gelsinger announced plans to launch processors designed to power laptops capable of artificial intelligence (AI). This innovation is expected to strengthen Intel’s product portfolio and could potentially offset some of the challenges facing its data center business.
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