The main issue is that for all we joke about Italy, they were a great power and their performance was significant. Italy basically made it very difficult for Austria-Hungary to perform independent offensive operations, and basically gave Serbia an extra 6 months and delayed Gorlice-Tarnow that long., as well as delaying Bulgarian entry and probably ensuring that Romania joined the Entente. Change all of these and Russia is crippled 6-9 months ahead of schedule, Austria-Hungary does not take that killing blow, and there is a lot more pressure on the Western Front, and this is just with a neutral Italy.
It's still possible, but you basically need Italy to join in during August 1914 and then Germany to suffer disasters in the East and West (no Tannenburg, nastier loss on the Marne) which means Italy's troops basically only stabilize the fronts. Then you have the issue that the CP can't replace Italy's coal imports from the UK, so Italy does not really add much firepower to the mix. Russia probably suffers worse, but France and the UK are probably in an OTL or better position by the time the US joins in, and from that point have difficulty losing
Italy will lose the Dodecanese to Greece. Istria will probably end up as part of Yugoslavia from the beginning, unless somehow this causes enough ripples for Austria to keep their coastline and Slovenia. I could see some voices to keep a stronger Austria as a buffer between resurgent Italian and German powers.
Butterflies probably do probably result in a much, much stronger Austria
A CP Italy means that there is no Isonzo front, and the Italian navy makes supplying Salonika impractical. As a result Austria is only fighting on the Serbian front, which almost certainly closes much earlier without the Isonzo, and the Russian front, which probably ends on time and without a Brusilov style disaster. Austria-Hungary is probably the last of the CP Great Powers standing and when Germany, Italy and the Ottomans surrender is in control over all of her territory while occupying Serbia and parts of Russia. France and the UK don't really care about A-H, the US does not give a shit, so A-H probably only has to make minor concessions to Serbia as nobody want to spend an extra six months fighting them to enforce a harsh peace
In any case Italy is likely not to be resurgent. Joining the CP would not have been that popular and you will see lots of blaming the idiots responsible, leading to internal political instability. You also would have years of deprivation, as Italy is dependent on imports that the British blockade would stop, and there is a good chance that instead of Gallipoli and Salonika you have invasions of Sardinia and Sicily that wreck those territories. So Italy is likely an economic basket case