Why did INTC's Q2 2024 earnings fall short?

Intel's Q2 2024 earnings fell short due to a combination of factors:

1. **Weak Demand for Traditional Data Center and PC Chips**: Enterprises are prioritizing spending on advanced AI server chips, which is hurting demand for Intel's traditional central processing units (CPUs) that have been the mainstay for data centers. This shift in demand is evident as Intel's data center business revenue only saw a modest 5% year-over-year increase to $3.0 billion in the DCAI segment.
2. **Competitive Pressures**: Intel faces significant competition in the AI component market, particularly from NVIDIA and Advanced Micro Devices (AMD). NVIDIA's dominance in the AI chip market, with its powerful graphics processing units (GPUs), is a major challenge for Intel. While Intel has launched its Gaudi 3 AI chip to compete, it is still a late entrant in this space and faces a steep competitive landscape.

In summary, Intel's Q2 2024 earnings fell short due to weak demand for its traditional data center and PC chips and intense competitive pressures from rivals in the AI component market.