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Intel’s Quarterly Revenue Tops Expectations, Investors Await New CEO

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Intel (INTC.O) reported better-than-expected results for its December quarter on Thursday, surpassing analysts’ low estimates. However, the chipmaker’s forecast for the upcoming quarter fell short, as it faces weak demand for its data center chips. Investors are also awaiting clarity on Intel’s leadership following the ousting of former CEO Pat Gelsinger last month. Currently, two interim co-CEOs are at the helm of the company, which has struggled to compete with rivals like Nvidia (NVDA.O), particularly in the AI chip market.

The quarterly results were overshadowed by concerns about Intel’s long-term strategy and leadership transition. Despite this, the company’s shares rose by 3.8% in after-hours trading, a relief after a challenging year where Intel’s stock lost around 60% of its value.

Intel’s struggle to capitalize on the booming AI market was evident when Co-interim CEO Michelle Johnston Holthaus announced that the company would shelve its upcoming graphics processing unit (GPU) design, Falcon Shores. Instead, Intel plans to use the chip internally as a test product, with a focus on future data center AI chips.

For the first quarter, Intel projected revenue between $11.7 billion and $12.7 billion, below analysts’ average estimate of $12.87 billion. The company cited “normal seasonality” and potential tariffs under the Biden administration as factors contributing to its cautious outlook. According to CFO David Zinsner, the possibility of tariffs may have prompted some customers to buy Intel’s chips ahead of potential price increases.

Intel’s ongoing transition includes a focus on becoming a contract chip manufacturer for other companies, but this shift has raised concerns among investors about its cash flow. Last year, Intel abandoned its forecast of selling over $500 million worth of its new AI chips, Gaudi, which struggled to compete with Nvidia’s products.

For the upcoming quarter, Intel forecasted break-even adjusted per-share earnings, while analysts expected adjusted profits of 9 cents per share. The company has received federal grants under the CHIPS Act, which helped boost its revenue and profit margins for the fourth quarter.

In the personal computer market, which remains Intel’s largest revenue segment, global shipments grew only modestly last year, missing analysts’ expectations for a stronger rebound. Intel has also been losing market share in both the PC and server CPU sectors to competitor AMD (AMD.O), a trend expected to continue into 2025.

 

Lonestar Data Holdings Plans to Place First Data Center on the Moon

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Lonestar Data Holdings, a space startup, is preparing to launch the first-ever data center on the moon, aiming to harness lunar resources for space-based computational needs. The company has announced that its fully assembled data center, named Freedom, will be launched by SpaceX’s Falcon 9 rocket, integrated with Intuitive Machines’ moon lander, Athena, in late February.

Key Points:

  • Moonshot Mission: Lonestar’s ambitious plan is to place a data center on the lunar surface, leveraging the moon’s distance from Earth for enhanced communication security. This initiative is focused on disaster recovery and data storage, rather than latency-dependent tasks like real-time computing.
  • Sustainable Energy Model: The data center will be powered by solar energy and feature naturally cooled solid-state drives. The company aims to take advantage of the moon’s abundant solar energy and a cost-effective cooling system, making the operation both efficient and sustainable.
  • Strategic Partnerships: Lonestar has already signed up a diverse set of customers, including the State of Florida, Isle of Man government, AI firm Valkyrie, and even pop rock band Imagine Dragons. These partnerships underline the growing interest in space-based data storage solutions.
  • Ground Support: To ensure operational reliability, Lonestar’s moon-based data center will be backed up by Flexential’s data center facility in Tampa, Florida. This hybrid approach aims to balance the challenges of space operations with the security of terrestrial backups.
  • Challenges and Risks: Despite the potential, hosting data centers in space comes with challenges such as high launch costs, limited maintenance options, and the risk of rocket launch failures. Once a satellite or data center is deployed, it becomes a high-risk venture with no room for recovery in case of malfunction.
  • Industry Growth: The idea of space-based data centers is gaining momentum as the demand for computational power, especially for AI, increases. Lonestar has raised nearly $10 million, joining other space startups like Lumen Orbit, which recently secured $11 million for similar ventures.

Talen Energy to Appeal FERC’s Rejection of Amazon Data Center Deal

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Talen Energy (TLN.O) announced plans to appeal the Federal Energy Regulatory Commission’s (FERC) rejection of an amended interconnection agreement for an Amazon data center at its Susquehanna nuclear plant in Pennsylvania. Earlier this year, Talen Energy sold a data center connected to the plant to Amazon (AMZN.O), aiming to increase its capacity from 300 megawatts to 480 megawatts.

However, the deal faced opposition from major utilities American Electric Power (AEP.O) and Exelon (EXC.O). FERC sided with these companies in a November 1 ruling, blocking the interconnection agreement. Talen Energy requested a rehearing in December, but FERC’s failure to issue a decision within 30 days has made the ruling eligible for appeal to a U.S. Circuit Court of Appeals.

The company stated it will pursue an appeal to challenge the rejection. Despite the regulatory setback, Talen’s shares have surged over 200% this year, and were up 0.6% in afternoon trading.