Intel (INTC) shares move lower in after-hours trading after disappointing on first-quarter 2024 guidance. The tech developer beat fourth-quarter earnings estimates, posting revenue of $15.4 billion and adjusted earnings of $0.54 per share.

Yahoo Finance Live anchors Julie Hyman and Josh Lipton discuss Intel's figures centered around its AI investments and the PC market.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JULIE HYMAN: We're just getting some numbers--

JOSH LIPTON: Not going up.

JULIE HYMAN: --from Intel. Just in the past few moments, the earnings coming out, and let me just get right to it. The first-quarter forecast leaves the company a lot of room to miss estimates, and the shares are down 6%. First-quarter adjusted earnings per share, the company says, is going to be $0.13. That is less than half what analysts had been predicting. Adjusted revenue in Intel's first quarter are going to be $12.2 to $13.2 billion. $14.3 billion is what had been estimated.

Now you're looking there at the fourth-quarter numbers. Those numbers were fine. They beat estimates. But that forecast is a pretty big gap to what analysts had been expecting.

JOSH LIPTON: Yeah, I mean, it's going to be interesting to get more color inside exactly what they see ahead. There were some questions for the company-- one, PCs. What do they think PC shipments are going to look like in 2024? What do the trajectory of the kind of PC market look like to them? There's kind of some debate and discussion about the slope there.

Data center will be in focus too. Obviously that's where, you know, they find themselves competing against some big-name rivals. They were expected to have some new products coming out this year, and some bulls were betting on those to reverse some of the kind of market-share losses they've been seeing. So interesting. Waiting to hear a little bit more on the call as well. Will be fascinating.

JULIE HYMAN: So I'm looking at the various divisions here. Data center and AI revenue at $4 billion, that's about in line with estimates. Last quarter, Mobileye revenue $637 million, a little bit better than estimated. And client computing revenue at $8.8 billion a little bit better than estimated.

The stuff that Intel has been working on is long term, and Pat Gelsinger, their CEO, has basically been wanting the patience on the part of the market, right, as they get all of the fab stuff up and running eventually. That is the fabrication of chips. But in the meantime, you know, if the numbers aren't looking good-- and it's been uneven, I think we can say, when it comes to Intel's results. We'll have to see how that comeback is looking.

JOSH LIPTON: Yeah, I mean, certainly. Listen, some analysts, Julie, who cover this name were saying, in fact, they were calling this a make-or-break year for Intel. What they meant by that is just the new products on the way. They were looking for real verification on the AI narrative that Pat Gelsinger has been showing here. So they were looking at 2024 as really a pivotal year for this stock.

And at least initial reaction to this print isn't good. It'll be interesting get some analyst reaction as well.

JULIE HYMAN: Yeah, just wanted to highlight something else that our producer flagged, some commentary from Intel CFO David Zinsner talking about operational efficiencies being driven in the fourth quarter. They "comfortably achieved," he said, "our commitment to deliver $3 billion in cost savings in 2023. We expect to unlock further efficiencies in 2024 and beyond as we implement our new internal foundry model, which is designed to drive greater transparency and accountability and higher returns on our owners' capital."

Will that operational efficiency entail people efficiency, cutting jobs? I think that'll be probably one of the questions that they're going to get on the call.

JOSH LIPTON: Yeah, the foundry business, which you're mentioning there-- so making chips for others is a big part of Pat Gelsinger's kind of multiyear strategy and push. But investors have certainly questions about that, how excited they should be, and just kind of the economics of that business.