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Court, we're joined by Cody Aikry from Benchmark, a StoneX company. Cody, it's great to have you with us. This is, I would say, perhaps a historic drop for Intel stock. What do you think about this quarter and this huge miss in forecasts? Yes, you are right, Melissa. This is unprecedented, a 22% drop in premarket at this point.
This is a big, very big failure, no doubt about it: 20 cents in net income next quarter and almost 2 billion in revenue. It seems that all this is related to memory, to the PC. The data center business this quarter showed a result higher by about 5 billion. The foundry business grew by about 200 million.
Five, sorry, 500 million better in the data center business, and the foundry business is 200 million better. So, overall, very strong numbers for the September report. Revenue was in line with expectations, EPS was slightly better, by about 9 cents. So September was not bad, but as Simone said earlier, it seems that once the lower-priced inventory ran out, hardware manufacturers were forced to come back into the market and pay market prices, and that affected PC sales volumes .
We see that the forecasts for the overall PC market for this year have decreased by 20-25% . And that's a figure that will likely be further reduced given such data. So it seems like this is all a matter of memory, and we know what's going on with AI. Unfortunately, this only shows that Intel remains a company largely dependent on the PC market, with AI only indirectly, and the foundry business is still in the process of development, but still very dependent on PCs.
What are the implications of your statement for the rest of the chip production chain? Well, AMD reports next week, and they are also very dependent on the PC market. They don't have such a strong consumer slant, more corporate, so they will be a little more resilient. They are also benefiting from the trend in AI.
They are shipping their Helios and MI450 product. So this will be a compensation to some extent, which Intel does not yet have on such a scale. But there is no doubt that they will also be dragged into this general decline in the PC market. Yes, we are currently seeing Micron shares fall along with Seagate.
And Cody, I'm interested to hear your thoughts on the comments about memory pricing, and how CTOs and CFOs of companies review their budgets when deciding what they can afford in terms of memory. How do you extrapolate this comment to these areas? Well, Melissa, I mean the life cycle of a PC is getting longer by the years.
Now it significantly exceeds the three- five-year period. And so we've been seeing this as a cyclical trend in the PC market for some time now. So, if you think you can postpone your next PC purchase until next year or even the year after that, as a CFO, you're likely making that decision because of the uncertainty in memory prices, hoping that the supply situation will improve next year.
I don't think that will happen. We will likely face the same supply and demand dynamics next year as we do today. So I don't think you'll get cheaper PCs anytime soon . But I understand the logic of postponing purchases for as long as possible. How does this affect the broader thesis about Intel? Should we just go through this stage where we have to sacrifice margin?
What about the implications for data centers, manufacturing, and other elements that have caused such a stir? Well, the data center is still developing according to plan. We are still seeing a shift in usage towards agent-based inference, and so this trend will increasingly depend on processors, which are the backbone of Intel's business.
And we see it in their data center AI business: revenue is 500 million above expectations. So I think they benefit from this. They simply cannot fully compensate for the decline seen in the PC segment . So the AI trend for Intel remains very robust and will likely accelerate as agent-based technologies become a larger part of the workload.
With the emergence of solutions like Muse and products from OpenAI, we are seeing a real consumer trend towards even implementing agent-based systems. And all of this relies on processors, not graphics cards. So Intel is in a great position, as is AMD. But, unfortunately, this does not compensate for the real decline in the PC market.
It seems, Cody, that you are more inclined to see through these issues. I mean, of course, the conference call starts at exactly 5:00. There are many questions. But it seems like you think it's quite understandable why people are putting off buying a PC. The fundamentals are still strong in terms of processor demand, and the AI story remains relevant.
So, do you think the fundamentals remain in place, despite this inconsistent forecast for the fourth quarter? Yes, I think so, Melissa. I believe this is what makes Intel a $100 stock. This is the potential of AI and its turnaround in the manufacturing business . So it was never really about the PC.
This has not been the case for many years. They are constantly losing market share to AMD, and this has been a cyclical decline for the industry for many years. And so that wasn't a reason why anyone owned Intel, uh, a reason to sell Intel today, but it was never a reason to own it. So the reasons to own it remain.
They are making progress in their foundry business. We've heard that their work on 14A is expanding in scope and pace. So we are big fans of them likely becoming a real competitor to TSMC in the future. And that, after all, is the main reason to own Intel. And then the use of AI processors is a constant topic that will not go away.
This will only become more relevant in the future, and processors will be increasingly important to the overall AI infrastructure. So, there are reasons to own Intel. You will have to live through this pain, but I would buy aggressively here during this downturn. Cody, thanks for laying it all out for us right now. Thank you very much. Thank you.
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