Intel reports better than expected Q1 earnings but falls short on revenue outlook. Stock slides more than 5%.

Intel (INTC) announced its first quarter earnings results after the bell on Thursday, beating analysts’ expectations on the top and bottom lines. But the company’s Q2 outlook fell short of Wall Street’s estimates, sending the stock sliding.

Intel said it anticipates Q2 revenue of between $12.5 billion and $13.5 billion. Analysts were anticipating $13.63 billion for the coming quarter.

Intel is looking to grow its AI market share by challenging rivals Nvidia (NVDA) and AMD (AMD) with its new Gaudi 3 AI accelerator while hoping it can woo consumer and enterprise customers with its AI PC lineup.

The company reported earnings adjusted per share (EPS) of $0.18 on revenue of $12.72 billion. Wall Street was expecting an EPS of $0.13 and revenue of $12.71 billion, according to consensus data compiled by Bloomberg. Intel reported a loss per share of $0.04 on revenue of $11.7 billion in the same quarter last year.

“We are making steady progress against our priorities and delivered a solid quarter,” Intel CEO Pat Gelsinger said in a statement. “Strong innovation across our client, edge and data center portfolios drove double-digit revenue growth in Intel Products.

Intel CEO Pat Gelsinger presents chips with a new production technology. (Photo by Andrej Sokolow/picture alliance via Getty Images) (picture alliance via Getty Images)

Intel is in the midst of transforming itself from a designer and manufacturer of its own chips to a manufacturer of chips for third-party clients. So far, the company said it has six customers, including Microsoft (MSFT), which is developing its own custom chips.

The first quarter marks the first time Intel is reporting earnings under its new corporate structure. The company now reports revenue from its Client Computing Group, Data Center and AI, and Network and Edge divisions under its Intel Products segment. Altera, Mobileye, and Other now report under the All Other Segment, while Intel’s Foundry business reports under Intel Foundry. In announcing the restructuring, however, Intel also revealed that its foundry business lost $7 billion in the…

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