What drove Intel's Q4 2024 operating profit drop?

Intel's Q4 2024 operating profit drop can be attributed to a combination of factors:

1. **Revenue Decline**: Total revenue for the quarter was $14.26 billion. While this is not directly indicative of operating profit, it reflects the company's overall financial performance, which in turn affects profit margins.
2. **Operating Expenses**: The company's operating expenses for the quarter were not provided in the report. However, high operating expenses can eat into profits, especially if revenue is not growing at a similar rate.
3. **Gross Margin Pressure**: Intel has been experiencing pressure on gross margins, with a significant decline in gross margin percentage. For example, in Q2 2024, Intel's gross margin was 38.7%, which is near the lowest level in the company's history. This trend of declining gross margins indicates that Intel is facing challenges in maintaining profitability on its core operations.
4. **Market Conditions and Competition**: The semiconductor industry is highly competitive, and Intel is facing significant competition, especially in the AI chip market from companies like Nvidia and AMD. This competition is likely impacting Intel's ability to maintain market share and pricing power, which in turn affects profit margins.
5. **Strategic Decisions**: Intel's decision to ramp up production of its Core Ultra artificial intelligence CPUs, which can handle AI applications, has put pressure on margins in the near term. This strategic move may be impacting profitability in the current quarter.

In summary, Intel's Q4 2024 operating profit drop is likely a result of a combination of revenue decline, high operating expenses, gross margin pressure, market conditions, and strategic decisions.