Intel Corp (INTC) reported fourth-quarter results Thursday that showed the chipmaker making progress on its turnaround, even if investors weren't entirely convinced by what comes next.

The Numbers Tell a Mixed Story

Intel brought in $13.67 billion in revenue for the quarter, comfortably ahead of the $13.37 billion analysts were expecting. Adjusted earnings hit 15 cents per share, nearly doubling the eight-cent estimate. So far, so good.

But the headline numbers mask some interesting dynamics underneath. Total revenue was down 4% year-over-year, with notable divergence across business segments:

• Client Computing Group: $8.2 billion, down 7% year-over-year
• Data Center and AI: $4.7 billion, up 9% year-over-year
• Intel Foundry: $4.5 billion, up 4% year-over-year
• Total Intel Products: $12.9 billion, down 1% year-over-year
• All Other: $600 million, down 48% year-over-year

The Data Center and AI segment is clearly where Intel sees its future, and that 9% growth is a decent sign. Meanwhile, the traditional PC chip business continues to soften.

Intel generated $4.3 billion in cash from operations during the quarter and held approximately $14.27 billion in cash and cash equivalents at quarter end.

Betting Big on AI and Advanced Manufacturing

"Our conviction in the essential role of CPUs in the AI era continues to grow. We delivered a solid finish to the year and made progress on our journey to build a new Intel," said CEO Lip-Bu Tan.

Tan highlighted what might be Intel's most important milestone: shipping its first products on Intel 18A, which he called "the most advanced process technology developed and manufactured in the United States." The company is now working to ramp up supply to meet customer demand.

The Guidance Problem

Here's where things got less exciting for investors. Intel expects first-quarter revenue between $11.7 billion and $12.7 billion, with the midpoint falling short of the $12.49 billion estimate. Even less encouraging: the company anticipates breakeven adjusted earnings versus analyst expectations of five cents per share.

"Our priorities are clear: sharpen execution, reinvigorate engineering excellence, and fully capitalize on the vast opportunity AI presents across all of our businesses," Tan said.

Intel shares were down 5.74% in after-hours trading Thursday, changing hands at $51.15 as investors digested the softer-than-expected outlook.