Intel, one of the leading semiconductor manufacturers, is preparing to announce its fourth-quarter earnings after the market closes on Thursday. The tech giant's financial report comes at a time when Wall Street continues to show enthusiasm for artificial intelligence (AI), driving the rally of tech stocks.

In December, Intel introduced its Core Ultra line of PC chips, a move aimed at bolstering the company's AI capabilities. These innovative chips allow consumers to run AI applications directly on their laptops and desktops, signaling Intel's commitment to advancing AI technology.

Industry analysts are expecting Intel to report adjusted earnings per share (EPS) of $0.44 on revenue of $15.2 billion for the quarter. This would mark a substantial improvement compared to the same quarter last year when Intel reported earnings per share of $0.10 on revenue of $14 billion. It is also a significant turnaround from the first quarter of this year, when the company faced losses per share of $0.04.

There is growing anticipation for a strong year-over-year recovery within Intel's client computing group, which encompasses the chip division that supplies PC makers and enthusiasts. Analysts project client computing revenue of $8.4 billion, a notable increase from $6.6 billion in Q4 2022.

With the Core Ultra chips in play, Intel aims to stimulate PC sales in the coming year, particularly as consumers and enterprise customers seek to replace their devices bought during the pandemic. The incorporation of neural processing units (NPUs) in the Core Ultra line allows users to run certain AI applications locally on their PCs, reducing dependence on cloud-based services. This not only enhances convenience but also safeguards users' data by keeping it on their devices.

Despite these advancements, uncertainties surround the practicality and usefulness of onboard AI for end-users. Intel itself concedes that beyond a few early examples like local versions of chatbot applications and AI image-editing software, the full potential and scope of AI applications are yet to be defined.

For Intel's data center and AI segment, revenues are expected to reach $4.1 billion for the quarter, a slight decline from the $4.4 billion generated in Q4 2022. This segment serves as Intel's opportunity to compete with rival companies such as Nvidia and AMD. Intel's CEO, Pat Gelsinger, recently showcased the upcoming Gaudi3 accelerator, designed to power generative AI software and services, further emphasizing Intel's commitment to AI development.

On a separate note, Intel announced the opening of its newest chip manufacturing facility in New Mexico on Wednesday. This move is part of Intel's ongoing turnaround effort to regain its manufacturing leadership and market share, which it had lost to competitors like TSMC and AMD.

Furthermore, Intel is progressing in its plan to become a foundry for other chip companies. The Intel foundry services division is projected to generate $343 million in the quarter, a significant increase from $178 million in Q4 2022. During the Q3 earnings call, Gelsinger revealed that Intel had secured two unnamed customers for its foundry service and was nearing the finalization of a deal with a third customer.

Investors and industry experts will be closely monitoring Intel's fourth-quarter earnings report, particularly the company's progress in the AI space and its efforts to regain market dominance. The results may provide valuable insights into Intel's future trajectory and the effectiveness of its AI initiatives.