Intel's Stock Drops 9%. Are They Struggling to Remain Relevant? (cnbc.com) 76
"Intel used to dominate the U.S. chip industry," writes CNBC. But now "it's struggling to stay relevant."
Intel's long-awaited turnaround looks farther away than ever after the company reported dismal first-quarter earnings. Investors pushed the shares down 9% on Friday to their lowest level of the year. Although Intel's revenue is no longer shrinking and the company remains the biggest maker of processors that power PCs and laptops, sales in the first quarter trailed estimates. Intel also gave a soft forecast for the second quarter, suggesting weak demand... Intel is the worst-performing tech stock in the S&P 500 this year, down 37%.
Meanwhile, the two best-performing stocks in the index are chipmaker Nvidia and Super Micro Computer, which has been boosted by surging demand for Nvidia-based artificial intelligence servers. Intel, long the most valuable U.S. chipmaker, is now one-sixteenth the size of Nvidia by market cap. It's also smaller than Qualcomm, Broadcom, Texas Instruments, and AMD. For decades, it was the largest semiconductor company in the world by sales, but suffered seven straight quarters of revenue declines recently, and was passed by Nvidia last year.
Intel's problems "are decades in the making," according to CNBC, suggesting that one turning point was Apple's decision not to use Intel's chips in its iPhone. Now nearly every smartphone built uses Arm chips built by Apple and Qualcomm, while Apple's huge orders for TSMC chips "provided the cash to annually upgrade the manufacturing equipment at TSMC, which eventually surpassed Intel." Around 2017, mobile chips from Apple and Qualcomm started adding AI parts to their chips called neural processing units, another advancement over Intel's PC processors. The first Intel-based laptop with an NPU shipped late last year.
Intel has since lost share in its core PC chip business to chips that grew out of the mobile revolution... Apple stopped using Intel in its PCs in 2020. Macs now use Arm-based chips, and some of the first mainstream Windows laptops with Arm-based chips are coming out later this year. Low-cost laptops running Google ChromeOS are increasingly using Arm, too...
AMD made over 20% of server CPUs sold in 2022, and shipments grew 62% that year, according to an estimate from Counterpoint Research last year. AMD surpassed Intel's market cap the same year.
Meanwhile, the two best-performing stocks in the index are chipmaker Nvidia and Super Micro Computer, which has been boosted by surging demand for Nvidia-based artificial intelligence servers. Intel, long the most valuable U.S. chipmaker, is now one-sixteenth the size of Nvidia by market cap. It's also smaller than Qualcomm, Broadcom, Texas Instruments, and AMD. For decades, it was the largest semiconductor company in the world by sales, but suffered seven straight quarters of revenue declines recently, and was passed by Nvidia last year.
Intel's problems "are decades in the making," according to CNBC, suggesting that one turning point was Apple's decision not to use Intel's chips in its iPhone. Now nearly every smartphone built uses Arm chips built by Apple and Qualcomm, while Apple's huge orders for TSMC chips "provided the cash to annually upgrade the manufacturing equipment at TSMC, which eventually surpassed Intel." Around 2017, mobile chips from Apple and Qualcomm started adding AI parts to their chips called neural processing units, another advancement over Intel's PC processors. The first Intel-based laptop with an NPU shipped late last year.
Intel has since lost share in its core PC chip business to chips that grew out of the mobile revolution... Apple stopped using Intel in its PCs in 2020. Macs now use Arm-based chips, and some of the first mainstream Windows laptops with Arm-based chips are coming out later this year. Low-cost laptops running Google ChromeOS are increasingly using Arm, too...
AMD made over 20% of server CPUs sold in 2022, and shipments grew 62% that year, according to an estimate from Counterpoint Research last year. AMD surpassed Intel's market cap the same year.
They are still relevant (Score:2)
There's way more competition nowadays, therefore it's more difficult for Intel to continue as they were used to.
Their fall will likely take a decade or more, if they don't change at all.
80% of the market still (Score:5, Insightful)
Even in the summary quote the author admits that Intel sold 80% of the server CPUs to AMD's 20%. It's not the 99% that they once had but it's still the vast majority of servers out there. Sure the trend is towards increased competition from AMD and even ARM. But Intel is still a profitable company that has the majority market share. Seems pretty relevant.
Stock prices are kind of silly. Oh no the price dropped 9%! The company is done! One wonders if the article writer has some stock he shorted and wants to push it down some more with some breathy copy.
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That's all well and good, but server CPUs are not the bulk of the market. Apple moved all of their devices over to their own ARM chips, and now it looks like Microsoft is heading the same way. Intel could keep 100% of the "server CPU" market and still have lost the vast majority of their business.
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Server CPUs are far more expensive than their general market equivalent. I wonder how much of the resistance to change here is down to companies trying to keep their IT hardware homogenous, in other words, once their loss of market share there hits a certain point it will be very difficult to repair the damage.
Pat Gelsinger saw the problems and is trying to fix them, but he's dealing with a supertanker and it takes a very long time to turn things around.
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My thought exactly: IBM shed all its entry-level business architectures, the networking business, and finally the PC business to stay focused on high performance workstation chips and mainframes, only to see its hardware side shrink to... .the size of the mainframe market (workstation architectures having evaporated along with entry-level and midrange business architectures other than the PC). Profits are probably high per unit sold, but they aren't growing and aren't a significant force in the future of
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Server CPUs are far more expensive than their general market equivalent.
They are, but the desktop and laptop markets pay for most of the development costs of the CPUs and fabrication plants, which is why Intel worked from the bottom up when they displaced RISC processors for workstations and servers, and any ARM can do the same now to Intel.
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The question was "are they struggling to remain relevant," and the answer to that is a resounding no. Obviously future fortunes can change.
Sure. But in the markets ARM is playing, Intel has never played (whether they wanted to or not). Except for what Apple is doing, ARM has nothing to compete with Intel and AMD in the general-purpose computing market. Maybe this will change with Microsoft defining an ARM Windows platform. But up until now, ARM is too fragmented to be relevant in the traditional PC mark
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There's no such thing as a generic ARM PC that can run a generic, stock OS.
Genuine question if someone knows, is this a choice? Or is this something inherent to the architecture and structure of ARM? Its always seemed silly there's no "BIOS" for ARM or I can't buy an ARM device that just let's me, as you said, just "install" an OS. I just always assumed it was phone manufacturers and carriers being jerks but I feel as though there's no ecosystem like that yet.
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There's no such thing as a generic ARM PC that can run a generic, stock OS.
Genuine question if someone knows, is this a choice? Or is this something inherent to the architecture and structure of ARM? Its always seemed silly there's no "BIOS" for ARM or I can't buy an ARM device that just let's me, as you said, just "install" an OS. I just always assumed it was phone manufacturers and carriers being jerks but I feel as though there's no ecosystem like that yet.
As I understand it, most ARM devices don't have anything like BIOS/EFI/UEFI/Open Firmware to provide information about what hardware is present, so you configure the OS with a custom device tree file that provides that info instead. Some server hardware actually does have UEFI (SBBR [arm.com]), so presumably could support a truly generic boot image, I think, but someone more familiar with it may correct me on that point.
Re:80% of the market still (Score:5, Informative)
The question was "are they struggling to remain relevant," and the answer to that is a resounding no. Obviously future fortunes can change.
Sure. But in the markets ARM is playing, Intel has never played (whether they wanted to or not). Except for what Apple is doing, ARM has nothing to compete with Intel and AMD in the general-purpose computing market.
Sure they do [gigabyte.com]. Ampere Altra Max has 128 cores of ARM goodness. The benchmarks [phoronix.com] show it mostly running about half the speed of recent AMD and Intel offerings, and actually beating the Xeon in some tests, but using significantly less power to do it (resulting in better performance per watt).
And with more and more server workloads depending on outboard GPUs and TPUs for most of the interesting workload, raw server CPU performance is likely to take a back seat to power consumption anyway at some point.
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You go to Alma Linux and download a generic iso and go to town? Or grab the latest Windows server iso from Microsoft and install it? To date all the ARM offerings I've seen differ in what boot devices they support, require kernel forks and proprietary blobs, and usually custom distro forks from the vendor. It's enough of a hassle that it's just not worth it to me to even consider an ARM server at this point, unless it was from Apple.
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You go to Alma Linux and download a generic iso and go to town? Or grab the latest Windows server iso from Microsoft and install it?
Yup. The Ampere Altra Max can run unmodified Windows 11 Pro [jeffgeerling.com] out of the box. So presumably the unmodified Ubuntu UEFI/SBBR builds will run on it, too. Unfortunately, that support tends to mostly be limited to ARM server hardware [ycombinator.com].
To date all the ARM offerings I've seen differ in what boot devices they support, require kernel forks and proprietary blobs, and usually custom distro forks from the vendor. It's enough of a hassle that it's just not worth it to me to even consider an ARM server at this point, unless it was from Apple.
That's probably because you've only dealt with consumer-grade ARM hardware built using silicon from CPU manufacturers that either don't support UEFI/SBBR or don't support it properly (e.g. Raspberry Pi and every clone thereof).
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I think you can download the Server 2025 iso and install it.
It is in beta right now, so obviously you are not going to put it in production, but certainly that is the direction of travel.
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Apple exerts complete control over the hardware and software in Macs, so it's relatively easy for them to switch to another hardware architecture. Meanwhile, Windows runs on hundreds, maybe thousands, of different hardware profiles and it would be extremely difficult to support that many different systems if they all switched over to ARM. This is due to the fact, as other posters have poin
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Server was Intel's biggest profit sector up through Skylake-SP.
Re: 80% of the market still (Score:2)
Lots of commentary about how ARM will take Intel's market share, but there's nothing stopping Intel from making ARM chips. They have a license and everything.
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Stock prices are kind of silly. Oh no the price dropped 9%! The company is done!
Agreed. While 9% in one day is interesting, there have been far larger one day drops from other companies in the past few months. I don't hear the author questioning if those companies are relevant any more. If they're "concerned" about a one day 9% drop, what do they think of a 32% plunge in four months [marketwatch.com]? This from a company with multiple federal investigations [businessinsider.com], whose vehicles can (and most likely will) chop off your fingers [imgur.com],
Re:80% of the market still (Score:4, Informative)
Stock prices are kind of silly. Oh no the price dropped 9%!
Intel stock price is down 37% YTD. This is not a one day aberration. It's a serious indication of their future prospects.
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I wonder which does more IOPS/FLOPS on the average computer, the CPU (Intel) or GPU (NVidia)?
I wonder how the ratio of $$ spent on GPU to CPU has changed over the years, on both home computers and servers. (On the server side, a single H100 GPU is $40K+, and I don't think Intel has anything that can command that kind of money.)
My first GPU was a Canopus Pure3d which was, apparently, $179
http://www.3dgw.com/review/pur... [3dgw.com]
The CPU I used it with was like $7
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On my computer:
Threadripper Pro 3945WX - 59 GFlops
RTX3080Ti - 34,000 GFlops
That is a relatively fast CPU paired with a relatively slow GPU. The GPU does waaaaaaaaaaay more Flops.
Re: 80% of the market still (Score:2)
It more likely says something about past irrational exuberance than it does future performance.
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Stock prices are kind of silly. Oh no the price dropped 9%! The company is done!
Agreed. While 9% in one day is interesting, there have been far larger one day drops from other companies in the past few months. I don't hear the author questioning if those companies are relevant any more. If they're "concerned" about a one day 9% drop, what do they think of a 32% plunge in four months [marketwatch.com]? This from a company with multiple federal investigations [businessinsider.com], whose vehicles can (and most likely will) chop off your fingers [imgur.com], and has at least one vehicle you can't put through a car wash [futurism.com] or it voids the warranty.
Stock prices are not necessarily an indicator of performance, especially in the short term. For example, on March 8, Nvidia stock dropped almost 12% in one day. Does that indicate that Nvidia is worse off than Intel?
Then there's Tesla. Their fundamentals don't look good because the total EV market has leveled off at the same that Chinese companies are ramping up competition. Tesla's quarterly report was bad, but they announced in a hazy way that they would produce a lower-margin car sometime in the futu
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Tesla's quarterly report was bad, but they announced in a hazy way that they would produce a lower-margin car sometime in the future, which caused the stock to soar. This should all be obviously bad news, but the stock price went up. Go figure.
I wouldn't say it soared. I would say that it recovered a bit, because the market had previously overcorrected. It is still below its highest March 2024 close, and barely half of its peak price.
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Stock prices are kind of silly. Oh no the price dropped 9%! The company is done! One wonders if the article writer has some stock he shorted and wants to push it down some more with some breathy copy.
Nvidia went down 10% a week ago, and now it's back up. This is a silly article they wanted to write and used the 9% drop as an excuse. Is Intel a growth stock, probably not in the near or middle term. But it's hardly a company that is not worth anything. theyve been a stagnant company that everyone is watching and wondering if they can become a leader again especially with the new CEO. Their next generation of chips has a new architecture so they are changing and evolving.
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That makes it a possible recovery stock rather than a growth stock.
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The question is who are intel's competitor and how well are they doing in comparison. Let's look at the last 5 years to avoid local effects.
Intel is -38% over last 5 years
Direct competitors are AMD and NVIDIA
AMD is +457% over last 5 years
NVIDIA is +1817% over last 5 years
Not necessarilly direct competitors but relevant
ARM holdings is +67% over last 5 years
Samsung is +69% over last 5 years
TSMC is +210% over last 5 years
Apple is +220% over last 5 years
So yeah, if you look at stock price Intel is in trouble.
I
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Intel's margins in dcg are awful. They're maintaining market share by practically giving away 10nm hardware. Once they move to Intel 4/3 and beyond, their volume will slide (Granite Rapids) and it'll be a disaster.
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Re: 80% of the market still (Score:2)
Yeah I was gonna say they still have a solid footing with their relationships and institutional know-how. They've had some strategic missteps, but they are well positioned to catch themselves before they fall.
Re:80% of the server market still (Score:3)
AMD is pretty close on Intel's tail for the server market. Arm and the mobile-derived processors, on the other hand, aren't making much of an inroad there.
For server processor's it's all about the CPU sram cache. Intel learned that lesson from AMD 20 years ago. AMD inexplicably forgot it in their following generation of processors and has only recently started making good server chips again.
Mobile processors are all about power consumption. Best bang for the watt. That starts with a software-level instructi
Netcraft unavailable for comment (Score:4, Funny)
I don't know who this CNBC are, I'd be looking to Netcraft to confirm whether Intel are dying.
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CNBC is a respected source of financial news that has been around for decades.
Netcraft is either some sort of "internet services company" or the manufacturer of fishing lures - difficult to tell from the not-Google web search results.
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I don't know. My sources say, and netcraft confirms, that CNBC is dying.
The future looks bleak for CNBC. In fact, there won't be any future at all because CNBC is dying.
Just to let you "in" on this joke, check out this ancient post. Note the date. It was already an old joke even then. https://slashdot.org/comments.... [slashdot.org]
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I'm so old I had to increase my browser zoom to 250% to confirm that the poster's userid was indeed in the 7 million range. To be posting on Slashdot and not get the Netcraft reference...
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Whooooosh! I wonder if they even understand whooooosh?
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But Intel++ is up.
buybacks (Score:1)
maybe they shouldn't have spent billions on stock buybacks
Re: buybacks (Score:2)
Buybacks make a lot of sense if you don't currently have a good place to invest profits. They are very common in mature successful cash cows. The more money you have, the harder it is to produce decent returns for each dollar spent. I stead you send it to your shareholders and if they have a better idea, they can sell and reinvest elsewhere.
VM Stack is going AMD (Score:3)
Adios Intel (Score:3)
With ~20 billion transistors on an i9 it would be impossible for one person or even a team of people to comprehend all the logic involved and how it interacts with everything else, given that it would take a human 138 years to count to only one (1) billion. Not to mention Intel's somewhat dodgy practice (since 2013) of putting an MEI (ARC) co-processor on the die with an encrypted code base that runs and has access to the entire bus (out of band) even when the box is connected to AC but powered off. Not to mention that Intel will sue you into the stone age if one tries to replicate their instruction set (think NEC V-20 in the 80's). Not to mention that it takes roughtly 3,500 pages of pdf to describe the operation of today's chip at only the software level. Not to mention that the instruction set proper has transmogrified into a living hell of features layered upon features since the 8086.
I'm putting my money on RISC-V-64. Unencumbered IP. Simple. Well-documented. Understandable by a mere mortal guru. Implementable by anyone with a FPGA and the nerve to try. And high-performance, professionally designed RISC-V ASICs will emerge.
--
Make it as simpler as possible. But not simpler. (Albert Einstein)
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# My bad. /simple /
s/simpler
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I'm putting my money on RISC-V-64.
I will happily counter bet. People have been predicting Intel's demise for decades. Even now you say "adios Intel" completely obvlivious to the fact that share prices are currently driven by AI not by CPU sales.
They aren't going anywhere. Jensen Huang and his shiny $trillion company can't do shit without a CPU sitting under their hardware. RISC-V may be a contender sometime in the mid 2030s, but right now I'll happily bet the entire farm against you.
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It is relevant that Intel has lost money three of the last four years.
Revenue is nice, but earnings are what count.
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RISC-V64 may be "simple" now.
Imagine it with 32 cores or more. It will probably run into multi billion transistors although much of them may just be copies of blocks of transistors (CPU cores being copy pasted, etc).
Re: Adios Intel (Score:2)
The number of developers responsible for that level of development is a tiny tiny fraction of the people developing on those systems who couldn't care less about anything except "will it run X?"
Any improvements over Intel with some RISC architecture needs to be able to sell itself to a web developer who's just ticking a box on the cloud console.
bean counters (Score:2)
Is this the bean counter effect?
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> I like to call it "pulling a Boeing"
Oh shit!, PC's will catch fire then blow a port door
It's a very complex question (Score:2)
Backward complexity is both a curse and a blessing
The x86 architecture may have made sense when it was invented, but today it's a mess
Unfortunately, backward compatibility is a big part of Intel and Microsoft's success
Abandoning old designs causes immense pain for customers
Trying to move tech forward while maintaining backward compatibility makes the design challenge much harder
Not everyone limits their computer use to the few popular use cases. Some very expensive automated tools depend on x86 computer con
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Legacy x86 doesn't really mean anything from a compatibility standpoint or a performance standpoint. Yes orgs can figure out how to run on ARM now, but the predicted end to x86-64 CPU performance scaling never happened, so it's a wash.
x86 isn't holding Intel back.
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Intel can make both x86 and newer style chips, it's not either/or.
Re: It's a very complex question (Score:2)
Intel did just release documentation for a new architecture called x86S which notably breaks compatibility with any 32-bit OS.
This is a pretty big step in terms of backwards compatibility philosophy, even if the actual technical differences are isolated to OS developers (32-bit apps are still supported in compatibility mode). Most importantly, they get to remove a bunch of craft from the chip, which can help future designs.
Intel probably got pretty skitish after the Itanium/AMD64/EM64T disaster. But if they
No (Score:2)
BS (Score:2)
Is hard to take seriously a piece saying "nearly every smartphone built uses Arm chips built by Apple and Qualcomm" - largest share of the market is MediaTek at around 33% and Qualcomm is bigger than Apple.
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Hah, Intel is too busy plundering the Feds to potentially spin off their gabs for Wall Street to plunder them.
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fabs
Intel has a fab... (Score:5, Interesting)
The thing that keeps Intel relevant is the fact that they have fabs, and moving to a 1.8 nm process node later this year. That, and the US DoD [intel.com] choosing them for some large projects.
There are many companies designing CPUs, but even if one has something truly awe-inspiring on their Palladium simulator [1], none of that matters until it hits silicon, and there are very few companies that can do that. There are also different process nodes. Running MCUs that do a small task don't need sub-nanometer process nodes... they need process nodes around 20nm before voodoo has to be done to maximize out yield and cost of high volume fabbing. However, CPUs, and matrix-multiplying processors need to be on the best process node available. For the most part, there is pretty much TSMC, Intel, Samsung, and Micron.
Next to Intel having DoD contracts, Intel also has been working on making their process nodes more ARM and RISC-V friendly. Even with that, Intel also mentioned having X86S [tomshardware.com], a simplified amd64 architecture. Not sure how it compares to ARM or RISC-V, but it seems to be an advance on that front.
Overall, I don't think Intel is going anywhere. Worst case, if something happens and they completely implode, the government will pick them up as they did with GM and Chrysler because having the latest fab technology is important to national security.
[1]: Nothing like the joy of "first light" when a CPU in the simulator manages to boot the Linux kernel. It means that even though tape out is far away because there is a ton of tweaking before first silicon, the core stuff works.
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You really think Intel is moving to a "1.8nm process" later this year? Stop drinking the Wylers.
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The thing that keeps Intel relevant is the fact that they have fabs
What keeps Intel relevant is that they dominate the general-purpose PC CPU market. It's still a massive market. It is still dominated by Intel. And a bunch of share holders in Wallstreet sitting in their offices furiously wanking over AI generated pictures of the word AI doesn't change the fact that all the H100s in the world from the new favourite golden chip company (green chip company?) don't do shit without a CPU, an market that is (I repeat) completely dominated by Intel.
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The thing that keeps Intel relevant is the fact that they have fabs, and moving to a 1.8 nm process node later this year
This time for sure? Intel has flubbed node shifts before.
Why link a CNBC article? (Score:2)
Yeah I get it, they had yet another bad earnings report and their stock is down. Meanwhile, the tech community has been documenting Intel's struggles for years, despite the apologists and asteoturfers trying to make it seem like everything at Team Intel is just hunky dory.
Intel has been slowly falling apart since around 3017-2018. And the seeds for that were planted further back. They may have reached the point of no return.
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astroturfers. Speeling sucks.
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And 2017. Gah this is what I get for posting on mobile.
Radical redesign for the modern era (Score:1)
Re: Radical redesign for the modern era (Score:2)
I've always bought Intel CPUs and never had any issue with bent pins and I've never received one that requires thermal paste (beyond what comes with pre installed cooler).
It sounds like you're talking about a CPU niche that most people couldn't care less about.
Wintel just feels like dogshit right now (Score:1)