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
132 Comments on Intel Stock Swandives 25% in Friday Trading Spooked by Quarterly Results
Once the iPhone proved to be a hit, Intel started working on a low power comparable chip for phones and spent tens of billions on the project -- but they were so afraid of cannibalising their own much higher margin desktop/laptop processors with their mobile offerings, they refused to fund the project sufficiently for it to be a success or release what they had around 2008 (when they would've compared favourably to their competition in the mobile space). This was on par with Kodak refusing to release the digital camera in fears of cannibalising their film business. Intel resurrected the project about half a decade later and their mobile processors were by this point way too slow, inefficient and too far behind the competition. That's strike 2.
Finally, he also canned Intel's Larrabee/discrete GPU project -- which was the right time for them to enter the discrete GPU market (as Intel were riding high on their success at this time, with AMD completely failing with Bulldozer) -- and launching it with their resources available at that time would've by now put them on par against AMD and Nvidia in the discrete and integrated GPU market (they re-used a lot of designs, concepts and tech from that GPU in their current Arc GPUs today. They didn't bother and therefore missed out on the crypto bubbles and the HPC discrete GPU markets that AMD and Nvidia profited handsomely from.
Intel have fumbled too many times to count and fully deserve their current place in the market today.
I also want them to learn from this mistake they made. They have got to learn that when it comes to research and development and innovation, you cannot take your foot off the gas pedal. You have to keep that gas pedal floored or your competition will do it for you. (See Apple, nVidia, and AMD) They were king of the hill for way too long and thus they thought that they could take their foot off the gas. *buzzer sound* Wrong answer!
Everyone went fabless, Intel didn't, used to be an advantage but now they're spending god knows how much on R&D and they can no longer compete with TSMC anyway and they never will.
Giant stockpile of cash wasted on useless acquisition sprees, lots of tech giants are guilty of this but even when these acquisitions were relevant (AI/GPU) they still failed to make a dent in those markets.
Slowly screwing up their data center side of the bushiness, even to this day they don't have a proper response to AMD's Epyc top of the line offerings which literally get you double the cores for the same price, totally inexcusable.
No wonder stock holders are unhappy. They didn't, best case scenario for Intel is that they barely match a 7700XT in RT.
Also Intel pissed a lot of money into SD-WAN and a buncha SaaS companies and networking companies they aren't even going to use.