Intel told investors on Thursday that it expects lower margins in its data center business, a day after announcing a multi-billion dollar investment at the White House.
At its investor meeting on Thursday, Intel's VP of its data center group, Diane Bryant, said its data center profit margins would drop over time to the low-to-mid 40 percent range,down from their historical norms between 45 and 50 percent. Shares briefly fell nearly 2 percent in heavy volume, before recovering, last down about 1.5 percent.
The company's data center business sells products to enterprises and cloud computing providers to use in their data centers. It's been a critical contributor to Intel's growth: in 2016, data center revenue amounted to $17.2 billion, up 8 percent from the previous year; the only faster-growing segment was its much smaller Internet-of-Things segment, where revenues grew 16 percent to $2.6 billion.