The good news for Intel is that its latest financial projections exceed expectations. Perhaps that is why CEO Pat Gelsinger is bullish about the threat of a new generation of Arm chips.

During an earnings call with investors, CEO Gelsinger dismissed the threat to Intel's traditional x86 CPUs posed by the new generation of Arm chips announced by Qualcomm and reportedly planned by AMD and Nvidia.

"Arm and Windows client replacements are generally relegated to an insignificant role in the PC business. We take all competitors seriously, but we think history will guide us here. We don't think they are likely to be that significant as a whole," Gelsinger said.

However, in a bit of a contradiction, Gelsinger also expressed the view that Arm chips could be good for Intel's emerging customer foundry business, where Intel uses its own factories to manufacture chips for its customers.

"If you think about other alternative architectures like ARM, it's also a great opportunity for our foundry business. It's hard for Intel to make a lot of money manufacturing Arm chips for their customers, if they have historically proven to remain inconsequential.

In any case, this comes on the heels of Qualcomm's announcement of a new Arm-based CPU specifically designed for PCs and touting performance comparable to the best existing x86 processors. In addition, there are reports that both Nvidia and AMD are planning to deploy Arm chips as the exclusive agreement between Qualcomm and Microsoft expires in 2024.

Indeed, Microsoft itself expects Arm chips to account for 25% of the PC market by 2027. If that happens, it will undoubtedly be "significant." Still, whatever happens in the x86 vs. Arm case, Intel's fortunes seem to be on the upswing.

Intel increased its revenue forecast for the quarter from $14.6 billion to $15.6 billion and also increased its earnings per share forecast.

The latest analyst data also supports this, with PC sales in Q3 2023 shrinking significantly YoY. The market appears to be bottoming out.

What this means for PC gaming, on the other hand, is less clear. Given the high technical demands of gaming, it is likely that gaming rigs will be the last bastion of x86 chips if the market shifts decisively in the direction of Arm processors.

On the other hand, if PC sales were to boom again, how would this affect, for example, CPU and GPU pricing It is unlikely that increased demand for PCs would contribute to this, as the market for CPUs and GPUs would be much more competitive than for CPUs and GPUs.