Intel warned it is struggling to meet surging demand for server chips used in artificial intelligence data centers, forecasting quarterly revenue and profit below market expectations and sending its shares down 13% in after-hours trading.
The company said it was caught off guard by a sharp rise in demand for central processors used alongside AI accelerators, such as Nvidia’s GPUs. Despite running its factories at full capacity, Intel said it cannot currently produce enough chips to satisfy customers, leaving profitable data center sales unrealized.
Chief executive Lip-Bu Tan told analysts he was disappointed by the company’s inability to fully meet demand. Intel forecast current-quarter revenue of $11.7 billion to $12.7 billion, below analysts’ expectations, and said adjusted earnings would likely break even, missing forecasts for a modest profit.
The warning highlights the challenges Intel faces in a fast-shifting chip market, where product plans are set years in advance. While AI-driven data center investment has surged, Intel said it lacked the flexibility to rapidly adjust manufacturing output. Finance chief David Zinsner said cloud customers were also surprised by the pace of AI-related upgrades, forcing them to modernize aging systems.
Intel is pursuing a turnaround focused on cost cuts and a refreshed product roadmap, but analysts said the recovery remains constrained by supply rather than demand, delaying financial improvement despite strong customer interest.
