Intel (INTC) reported disappointing first-quarter guidance that missed revenue expectations by over $1 billion. Matt Bryson, Wedbush Securities SVP, joins Yahoo Finance Live to analyze the results.

Bryson says he was "a bit surprised" by the size of the guidance miss. However, he notes that data from Taiwan pointed to a fourth quarter slowdown in PC production. Bryson believes excess inventory and overshipping in the fourth-quarter led to Intel now working through a backlog, leading to the announcement.

Looking ahead, Bryson provides a more optimistic view on the 2024 PC market outlook. He acknowledges that exceptionally high COVID-era demand contributed to the current cooldown. But with the closing of a 3-4 year corporate refresh cycle and new PC innovations emerging, Bryson expects "a pretty nice refresh starting towards the end of 2024 into 2025."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

[AUDIO LOGO]

JULIE HYMAN: Intel shares sliding after the company's first-quarter guidance missed the Street's expectations. Just to put a fine point on it again, here the company's revenue forecast at most, $13.2 billion. Analysts on average had been looking for $14.3 billion.

We're joined now by Matt Bryson, Wedbush Securities Senior Vice President, to talk more about this. Matt, are you surprised by what looks like a pretty big miss here on that first-quarter forecast? And what's going on at Intel?

MATT BRYSON: Yeah. I'm a bit surprised numbers are coming down as much as they are. You always end up with some seasonality in Q1. This was certainly a bit more than I'd expected. Having said that, if I'd have to guess what we're going to hear from Intel on the call, if you look at what was coming out of Taiwan in terms of numbers, their ODMs showed a slowdown in Q4. So PC builds slowed down.

Obviously, Intel CCG revenues, so their compute going into PCs, lifted a fair amount in Q4. I would bet that they just over shipped demand a bit in Q4. And what we're seeing in Q1 is those inventories getting worked down again. And if I had to guess, that's the reason for the lower guide.

JOSH LIPTON: And so, Matt, I'm interested in how you see the PC business over 2024. There's some debate between analysts as to what the PC market overall looks like. What's your take?

MATT BRYSON: So I actually think the PC market is going to end up looking pretty good. So in part, the reason that you saw those builds in Taiwan get reduced is it was OEMs looking to cut back on inventory, because I think everyone was a bit worried about macro. So I don't think there's a lot of finished goods inventory out there. Because builds were slower in Q4, you get an easier comp into Q1.

And then when you're thinking about the back half of the year, remember it was three or four years ago when we saw all those purchases tied to COVID. On the corporate side of things, there's typically a three-year refresh cycle. So I think you get to the end of this year between corporations refreshing their PCs, because service contracts are up, between there being a new Windows OS, between us not being that far away from Microsoft stopping support on Windows 10. I think you get a pretty nice refresh starting in towards the end of 2024 and to 2025.