Friday, August 2nd 2024
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Intel Stock Swandives 25% in Friday Trading Spooked by Quarterly Results
The Intel stock on NASDAQ slid 25% as of this writing, on Friday (08/02). This comes in the wake of the company's Q2-2024 quarterly results that held the company's profitability below expectations, leading the company to suspend quarterly dividend payouts starting Q4-2024, and engage a slew of measures to cut cost of revenue by over $10 billion. Among other things, this mainly involves downsizing the company across its various business units. Intel tried to keep investor spirits high by posting updates on how its 5N4Y (five silicon fabrication nodes in four years) plan is nearing completion, and how the company is at the cusp of raking in numbers from the AI PC upswing. To this effect, the company is launching its "Lunar Lake" and "Arrow Lake" processors within 2024, to address the various PC sub-segments. The Intel stock isn't churning in a silo, tech stock prices across the industry are witnessing corrections, although few as remarkable as Intel.
Source:
FT
188 Comments on Intel Stock Swandives 25% in Friday Trading Spooked by Quarterly Results
Yes Intel has let its tech fall behind TSMC a bit but they're still among the top fans of the world.
I do think there is the falling luxury goods market in general (notice how ARM, Qualcomm, Intel and NVidia are all down). But Intels stock change is especially worse than even it's peers....
BTW, we are moving from uni-polar, single-pole world dominated by G8, to multi-polar world with many economic centres, namely BRICS, G7, EAEU, ASEAN, etc.
Also, the semiconductors business should go downward spiralling, because the new wafers are extremely expensive, and the generation cadence rises from 1 year to 2 years, 3 years and more.
Of course, that people will not spend, because there will be no initiative to do so. With small, incremental updates, and worsening product stacks - rising power consumption, use of lower quality materials, etc.
www.theguardian.com/business/article/2024/aug/02/fear-of-us-recession-rattles-global-markets-as-tech-shares-fall
Yet they again decided tu use TSMC to manufacture their new CPUs.
That's a difference
We really need currencies that are backed by something real, like gold, or lithium.
Knowingly sending bad product out the door is just opening yourself up to trouble.
Don't kid yourself, they knew.
The softening economy is still a concern though, especially for Intel. "Not as much growth" as expected means fewer people buying computers, especially servers which are Intel's cash cow.
People are far more worried about money + personal finances right now. Its clear that the typical American average-joe has less money in the bank account today than last year. Whether this leads to a recession or not is still to be seen. But I think it is safe to say that people will be spending less than expected on high-tech items like computers.
All of these jobs we made are in a shrinking monetary base.
IE: We've been destroying money for 2 years now. The economy has been overheated (see inflation), and the banks have been trying to stop that for literally years.
He thought, that AMD is no more competition, and focused on high dividends and R&D cuts. Then not only AMD managed to reinvent itself, but also TSMC and ARM became even harder competitor. Also he abandoned GPU and now they are years behind nVidia and AMD while GPU is more profitable than CPU.
Then he faked an affair with employee and resigned. then there was Bob swan, having no clue what to do. And 5N4Y is simply too little too late.
This is a great lessons for investors. When a CEO focuses on high dividends and sacrifice R&D it will cause shares to go up in a short term, but then they will collapse.
People buy Intel Xeon because its a high performance server at (what should be) lower power than the competition. But its a bit more $$$$ than ARM or AMD. Of course, AMD has been grossly improving its quality (both performance and watts). So that's a big reason for Intel's seeming decline.
But we probably shouldn't go overboard on economic topics. You're right that by the time I'm posting about M2 and stuff we're too far away from the core topic.
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Luxury goods decline as people get worried about their personal finance. People will buy so called "inferior goods", goods that they know are lower-quality but offer a better price-efficiency. So I think Intel is poorly positioned in a hypothetical recession (or slowdown). In contrast, AMD has a reputation for both cheaper and somehow gained a reputation of higher-quality among many enthusiasts... despite coming in at a lower cost. AMD is your traditional "inferior good" (in terms of economics) that would benefit from economic slowdowns.
Stay alone, then. Bye :D
And, it is no secret that Intel has MDF division who "sponsored" many many tech reviewers up to date. Last of their "warriors" for instance is that german apologist Der8auer. Every time Intel has some shit hit the fan, Roman find some problems with his AMD based platform :D
LTT jumped ship 1-2 years ago.