Jan 30 (Reuters) - Intel's ( INTC ) first-quarter

revenue forecast on Thursday missed analyst estimates, as the

chipmaker grapples with tepid demand for traditional data center

chips and declining share in the key personal computer market.

Shares of the Santa Clara, California-based company fell

close to 2% in volatile extended trading. Last year, Intel's ( INTC )

shares lost about 60%.

As the chipmaker undergoes a historic transition and

attempts to emerge from one of its bleakest periods, it has also

struggled to cash in on a boom in investment in advanced AI

chips - a market led by Nvidia ( NVDA ).

In its quarterly report after the bell, Intel ( INTC ) said it

expects first-quarter revenue of $11.7 billion to $12.7 billion,

compared with analysts' average estimate of $12.87 billion

according to data compiled by LSEG.

Companies looking to capitalize on generative AI technology

have prioritized spending on specialized AI processors that can

churn huge amounts of data, crimping demand for the traditional

server processors that Intel ( INTC ) sells.

The company's outlook "reflects seasonal weakness magnified

by macro uncertainties, further inventory digestion and

competitive dynamics," interim co-CEO and chief financial

officer David Zinsner said in a statement.

Intel ( INTC ) last year scrapped a 2024 forecast that it would sell

over $500 million worth of its new AI processors, named Gaudi,

suggesting they struggled to compete against Nvidia's ( NVDA ) chips.

On an adjusted, per-share basis, Intel ( INTC ) forecast it would

break-even for the current quarter. Analysts expect adjusted

profit of 9 cents per share.

It is spending heavily to become a contract manufacturer

of chips for other companies, leading some investors to worry

about pressure on its cash flows.

Former CEO Pat Gelsinger was ousted last month, leaving two

temporary co-CEOs at the helm and shrouding Intel's ( INTC ) turnaround

strategy in uncertainty.

Intel ( INTC ) reported fourth-quarter revenue fell 7% from a year

earlier to $14.26 billion, beating estimates of $13.81 billion.

The PC market - Intel's ( INTC ) largest by revenue share - saw

global shipments rise only modestly last year, underperforming

analysts' expectations of a strong rebound after months of

declines.

The company has also been losing share in the PC and

server CPU market to rival AMD, a trend analysts expect

to continue into 2025.