Intel’s data center chips have been a bright spot for the company over the last few years as PC demand slowed, but a weaker-than-expected performance from that group in the first quarter left investors disappointed Thursday.
The Data Center Group posted quarterly revenue of $4.2 billion, up six percent from the previous year, but financial analysts were expecting the group to record $4.4 billion in revenue, according to Reuters. Investors dinged the stock in after-hours trading, despite Intel matching analyst estimates with overall revenue of $14.8 billion and net income of $2.96 billion.
It’s a little surprising that cloud computing businesses continue to thrive — both Amazon Web Services and Microsoft reported strong cloud numbers Thursday — yet Intel’s enterprise computing business fell flat. The company controls nearly the entire market for modern data center processors, as would-be challengers from AMD and ARM-based chip makers have made no traction.
Still, Intel did warn investors last year that growth would be slowing in this business over the next several years. Intel’s other two major processor divisions, the Client Computing Group and the Internet of Things Group, posted revenue increases of 6 percent and 11 percent, respectively.