Friday, August 2nd 2024
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
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.
Intel couldn’t get out of their own damn way to let Jim do his magic and now they’re suffering for it.
www.tomshardware.com/news/intel-ceo-bob-swan-to-step-down-replaced-by-vmware-ceo-pat-gelsinger-report
Shouldn't that be Gelsingerdives???
;)
Dollar vs Yen peaked on July 8th.
NASDAQ peaked on July 9th.
There's always an event that ends a bull market, and said event is virtually never seen until too late.
This has the potential to be that event.
Intel has had one core cause of their current problems. In the early 2010s, having eclipsed AMD in technology, intel's efforts began to slow down. Ivy bridge was a disappointing "improvement" over sandy bridge in IPC, as was haswell. Once we got to skylake, intel totally stalled out. Just more bland quad cores with 0 reason to upgrade, people talking on forums about how there was still no justification and why they would keep their CPUs another year or 5. As intel had slowed down, and boring conservative decisions were made instead of bold new ideas, younger engineers went to other companies, like apple, AMD, nvidia, qualcomm, ece.
Intel got complacent.
Then AMD hired Keller. The glove was thrown, but Intel slept. Then ryzen 1000 came out, with an 8 core for $200. Sure, intel was stilla head in benchmarks, but now the writing was on the wall that AMD had something. Still, intel did nothing. They released 6 and 8 core skylake parts with the 8 and 9 series, and those did perform very well. But as ryzen 2 and 3000 came out, it became clear that AMD was catching up quick. Without their young engineers and management, Intel was left with outdated, bloated bureaucracy and ideas, resulting in tiger lake being mobile only, rocket lack sucking the big one, and their iGPU division falling far behind. Intel gained ground back with Alder lake, then promptly tripped over their own shoe.
They should have learned from nvidia, whom despite being in the lead for ages, has never stopped innovating for so long. Even failures like the FX series, or Fermi, were still technical innovations even if AMD was slapping them silly. Now they're playing catchup, and trying to rush this kind of tech is NOT working out.
And the thing about it is, Intel hired Jim Keller to create a new CPU architecture, namely Royal Core. One of the main stars of Royal Core was something called "Rentable Units" that was supposed to replace Hyperthreading. However, as I alluded to in a prior post and how you alluded to as well, there was a lot of outdated and bloated bureaucracy, and that led to a lot of internal fighting, backstabbing, and sabotage that eventually led to Jim Keller leaving Intel far before Royal Core was anywhere close to being complete. It was said that inside the halls of Intel, many employees looked at Jim Keller, despite his many accolades, as an outsider. They saw him as more of an enemy than someone who could save Intel.
And now we have the fruits of that debacle. I disagree. While ARM is rather new in the PC space, it's more than established in the mobile market. And with the advent of Apple's M-Series of chips, it showed that ARM, despite it being a low-power core, could stand toe-to-toe with their more power-hungry cousins while figuratively sipping the power.
Puget systems gives no indication of how these systems have been used. Degradation is really dependent on usage and many of these systems might be lower end or x700 parts and not used 24/7 so they will not really show signs of degradation. This has been well documented as there's not one but a whole plethora of companies running server farms are saying these intel chips don't even last past the 6 month mark. Many server vendors know this and actually jack up a thousand dollars to buy intel for 'support costs' simply because they know they will have to replace the CPU.
Secondly, what you have to look at is field failure rates to spot the degradation. Notice how the 13th gen has more than double the field failure rates compared to 14th gen? That's because these chips are failing due to usage over time. Plot this graph a year later and see them rise way higher regardless of the microcode patch because as GN noted, Intel have been unsuccessfully trying to mitigate this degradation issue as they've known it for a while. And again, these aren't even all systems that are run 24/7.
Basically, Puget's failure rates are not in line with any of the system integrators who are using these chips 24/7 because those people are noticing >25% failure rates if not higher. Notice how not a single vendor who runs their system 24/7 is complaining about Ryzens whereas for 13/14th gen it's not only those people that are complaining but game devs, other companies, studios like epic games etc they're all saying the same thing - if there's a crash it's more likely its's the Intel CPU as it has degraded. Turns out, they've been correct all along even though intel tried to brush this under the rug and point the blame at others for the longest time now.
If you ignore all of the above, think about this . You mentioned Ryzen 5000's having a higher field failure rate. Those have been out since 2020, and looks like they have a 2% field failure rate which sounds about right. Problem is, these 13th gen Intel CPU's don't actually have a 1% failure rate. Puget sells all sorts of Intel systems, and obviously the lower end parts will not have failures especially if they haven't been used much. The issue is with the higher end 13/14th gen parts and the issue is twofold: They degrade quicker than the lower end parts and absolutely disintegrate when used 24/7. Mark my words, if you look at the total percentage of chips that failed for the higher end 13th gen parts, it will be way, way higher than 1% and keep rising with time.
Think rich influencers that aren't home as often or they mostly use a MacBook and only have the puget system for occasional gaming.
Knew someone w a falcon northwest that used a MacBook 80% of the time.
This could be a factor since they don't sell as many are are elite boutique SI not mainstream like cyberpower, Dell, hp, Lenovo, etc...
Ryzen 5000 don't have a 2% failure rate but closer to 5%.
The reason you don't see complaints - I can bet it's the 3 following.
1) Ryzen 7000 doesn't experience degradation. It just has a very high upfront failure rate. Meaning, it basically comes dead from the factory - at an alarming rate I'd argue. That's "easy" to notice before you deploy a server - so you never end up deploying one with a failed CPU - so you never have any crashes. With Intel the percentage even though lower, is split. 1% comes doa from the factory, another 1% dies after deployment. So naturally, youll have complaints cause some of your deployed intel servers are crashing.
2) Very important, not everyone is using puget's settings. Puget is running intel and amd defaults which naturally leads to lower failure rates compared to everyone else.
3) AFAIK everyone and their mother is using Intel. Intel outsales what, 8 to 2? Naturally there will be more complains about the market leader simply cause there are way more affected users, even if the percentages of failure might be similar.
Secondly, degradation happens with extended use case. This graph you keep spamming doesn't include all systems running 24/7 so it shows nothing. Also the CPU's in question with high degradation are the 900k's. Including 700k's only skew it in favour of them.
Also, you really think Intel are having all these issues and all the complains are coming in because their CPU's have a 1% defect rate with usage and the percentage of failures are the same as AMD? MULTIPLE server farms are reporting 25% - 50%, but you will use this Puget's chart who don't even have systems running 24/7 as it fits your narrative. But the source and data is flawed man, get that.
Also, no, Intel doesn't outsell AMD 80:20. Where do you even get that figure? Even Puget, who have historically leaned on Intel's side have said it used to be 80:20 till 2021 when AMD systems' demand increased. They don't even say what the current ratio is.
No, people aren't complaining because there's a 1% failure rate of the 'market leader'. A whole f ton of people are complaining because there's wayyyy more than 1% failure rate which intel have been unsuccessfully trying to cover up. Even rudimentary stats from europe shows 13th gen have more than 5% return rate when no CPU in recent times have anywhere close to 2%. There are many stats out there, just saying.
The only stats from Europe i've seen is mindfactory that has 13 and 14th gen at 1% return rate. For reference alderlake was at 0.48%.
In brief, the graph which shows Intel in a better light is from a system builder that proactively tries to mitigate chip voltage problems of those chips. It's not default settings. It's not demonstrative of the actual issues in plug and play default installations.
The point is, Puget aren't representative of the DIY build industry, or other system builders using default mobo (or worse, turned up) settings. Using their data is very much cherry picking the most favourable outcome for Intel.
Also field failure rates are useless for us end consumers. You don't buy cpus pretested by puget. Your failure rates - as long as you are using intel and amd defaults - will be the combination of shop + field failure rates as an end user. For people that don't know and don't care what a bios is 12th gen is their best bet, followed by zen 4 and zen 3 (im ignoring 10th cause they are too old by now). For people that do know what bios is, it's intel all the way - again - according to puget's data.
Whats fascinating is that somehow it's construed as though high shop failure rates is better than field failure rates. Basically shipping CPUs that are already dead or a week away from dying is better than shipping CPUs that are 6 months away from dying. I just can't get behind that. The numbers from zen 3 to zen 4 show a huge drop of the level of QC, not the other way around.
As for Tim "DLSS for life", as you can see in the thumbnail used in HU video, he is using the Nvidia goggles to check FSR's quality in more detail.
Also Hardware Unboxed is probably the only, or at least one of the few from the big YouTube tech channels that knows nothing about Intel problems this period. Instead they rushed to make a video about AMD's Zen 5 having problems to help with Intel's damage control. They invented "issues" with Zen 5 THE SAME day 9000 series was delayed.
They didn't done the same about the latest news about Nvidia's Blackwell having a design flaw. No, they are silent there.
In my opinion, HU became as big as it was necessary to start getting gifts from big corporations. Well, if Intel's expenditure cuts affects them, we might start seeing videos about the advantages of FSR over XeSS.
People should stop posting Hardware Unboxed as one of the objective channels. They are NOT.
The whole internet talks about Intel. They are silent.
There is a rumor about AMD. They rush to make a video.
There is a rumor about Nvidia Blackwell. Again, silence.
JMO always.
Secondly, see post#141. You're misunderstanding the whole issue which is primarily higher end 13/14 gen's degrading faster when used 24/7 under various loads (hereby accelerating the degradation curve). This chart doesn't represent that. It represents a relatively small sample size of AMD CPU's and differences between them and intel (both in field and shop failures) are largely negligible at best. These are all also running with Puget's settings which we don't know and hence we don't know how they perform either, both of which are huge caveats. But they did mention the rise in field failures for 13th gen so it's a space to watch out for because you're also forgetting a lot of people have just recently realised their "out of video memory" errors are actually that 13900K.
The reason most people aren't bothered by Puget's shop failure rate is because it literally doesn't align with any of the other larger retailers who report extremely low numbers of shop failures (from both camps, mind you). Also they're easy to diagnose, don't really affect the used market and numbers are below 1% from both camps so all is well on that front. The only sore thumb that sticks out is 13900K's rising in returns with time (even for Puget albeit less than everyone else). There have been numerous reports over the past few weeks of RPL returns being higher than prior gens and AMD from major European retailers. Alza.sk exposes their returns rate in their website and look at the 13900K being abnormally high at 5%. Then there's all these devs and farms who did some heavy lifting with these CPU's and they died. And judging by a 2x rise in July field failures for 13th gen for Puget, this graph will probably look different in a few months.