UPDATE 1-Intel forecasts second-quarter revenue below estimates

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April 25 (Reuters) - Intel forecast second-quarter revenue and profit below market estimates on Thursday, as it faces weak demand for its traditional data center and personal computer chips amid efforts to build its contract manufacturing business.

Shares of the Santa Clara, California-based company fell close to 5% in extended trading.

Enterprises have prioritized spending on advanced and speedy AI server chips, hurting demand for Intel's central processing units (CPUs), which have been the mainstay chip powering data centers for decades.

According to analysts, a surging demand for graphics processing units (GPUs) useful for AI applications has reduced the appetite for CPUs, which are Intel's main product.

Nvidia's powerful GPUs dominate the AI market, as large and small companies have sought to acquire tens of billions of dollars worth of its processors. Intel announced its latest AI chip, Gaudi 3, earlier this year, but it has struggled to take market share from Nvidia.

Preliminary results from IDC showed the PC market returned to growth in the first quarter after about two years of declines. Intel's projections cast a shadow on this expected recovery as it is one of the largest suppliers of PC chips.

Intel's contract manufacturing business, or foundry, is working to catch industry leader TSMC, but its profitability is years away.

The company expects second-quarter revenue in the range of $12.5 billion to 13.5 billion, compared with analysts' average estimate of $13.57 billion, according to LSEG data.

Intel forecast second-quarter adjusted earnings of 10 cents per share, compared with estimates of 25 cents per share. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)