Will Higher DataCenter Revenues Benefit Intel's Q3 Earnings?

Core Insights - Intel Corporation (INTC) is expected to report higher revenues in the third quarter of 2025, particularly from the Datacenter and AI Group (DCAI) segment, driven by the deployment of the Intel Gaudi 3 accelerator and advancements in AI solutions [1][9] Group 1: Revenue Drivers - The DCAI segment focuses on developing leading data center products, including Intel Xeon servers and field programmable gate array products, while managing the overall AI strategy [2] - Intel's partnership with Exostellar aims to provide cost-effective enterprise-grade AI infrastructure, enhancing cloud-like agility and efficiency for on-premises or hybrid setups [3] - The Intel Gaudi 3 AI accelerator is designed to significantly enhance AI training and inference capabilities, promising faster time-to-train and superior throughput [4] Group 2: Product Launches - Intel launched its AI Boost NPU and Intel Core Ultra 200V Series Processor, which powered the world's first fully rugged Copilot+PC in tablet form, designed for complex environments [5] - The Xeon 6 processors with Performance-cores (P-Cores) are expected to meet the high demand for AI workloads, offering up to two times higher performance in AI processing [6] Group 3: Market Trends and Challenges - Intel Xeon platforms have set benchmarks in 5G cloud-native core performance, leading to increased demand from telecom equipment manufacturers [7] - However, China's initiative to replace U.S.-made chips with domestic alternatives poses a risk to Intel's revenues, as a significant portion comes from the Chinese market [8][10] - The Zacks Consensus Estimate for Data Center and AI revenues is projected at $3.96 billion, up from $3.35 billion year-over-year, while total revenues are expected to decrease to $13.11 billion from $13.28 billion [11][12]