Intel saw its data-centric business grow significantly in 2019, while its recent acquisition of Habana Labs is set to strengthen its AI portfolio.
On Thursday (23 January), Intel reported that Q4 revenue was up 8pc on 2018, with the company earning $20.21bn in the final stretch of the year. With a strong end to 2019, the company has set an optimistic guidance for the year ahead.
The business expects Q1 revenue for 2020 to reach $19bn, which would be an 18pc increase on Q1 2019. Intel also expects earnings per share to hit $1.30 in the first quarter of the year.
The company has increased its quarterly dividend by almost 5pc to $0.33. After Intel announced the news, shares rose 5.6pc in after-hours trading to $66.85. Share prices of other chipmakers such as AMD, Nvidia and Western Digital also rose.
A record year for Intel
Intel’s annual earnings hit a record $72bn last year, with the company expecting to reach $73.5bn in 2020. The company saw record growth in its data centre group (DCG) revenue, which hit the $23.5bn mark for the first time after growing 19pc year on year in the fourth quarter.
It was the second highest-earning segment in the business after client computing, which is the side of Intel’s business that manufactures chips for mobiles and PCs.
Client computing led revenue despite the ongoing manufacturing supply shortages that the company is dealing with. Over the course of 2019, Intel’s client computing business brought in $37.1bn, growing 2pc in Q4 to $10bn.
Internet of things and AI was another big earner for the business, with this arm bringing in $3.8bn. The company was also helped by the increased adoption of Mobileye, its autonomous driving and advanced driver-assistance system (ADAS).
In its earnings report, the company said: “Intel acquired Habana Labs in the fourth quarter, strengthening its artificial intelligence portfolio for the data centre. Internet of things group revenue was up 13pc on strength in retail and transportation. Mobileye achieved record revenue, up 31pc year-on-year on increasing ADAS adoption.”
Investing in the future
Intel CEO Bob Swan said: “Several years ago, we began a transformation to reposition the company to take advantage of the data revolution that is reshaping computing … but our journey is just beginning.
“To reach our multi-year goals, we will continuously focus on three key priorities: accelerating growth, improving execution and deploying our capital for attractive returns.”
With the company bringing in $3.8bn in AI-based revenue, it looks to be preparing itself for the future. Intel expects the market opportunity for AI to be worth $25bn by 2024.
“We feel great about how we wrapped up the year with the best quarter in the company’s history,” Swan said. “In 2020, we’ll do it again. We expect it to be another record year. And our ambitions have just never been greater.”