Intel Stock Drops Toward 50-Year Low Amid Mass Layoffs (businessinsider.com) 54
Intel's stock plunged as much as 30% on Friday after the company issued disappointing guidance and announced plans for a substantial workforce reduction. According to Bloomberg, it was the company's biggest single-day drop since at least 1982. Markets Insider reports: The decline comes after the software company announced quarterly revenue of $12.83 billion, down 1% from the previous year and missing analyst expectations of $12.94 billion, according to LSEG estimates. The company also lowered its revenue forecast for the current quarter to a range between $12.5 billion and $13.5 billion, down from analyst estimates of $14.35 billion. Intel executives pointed to unexpected trends in the most recent quarter to explain how it performed this way even with product milestones.
"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," CEO Pat Gelsinger said in a press release. "Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies." Those operations and efficiency improvements include plans to lay off over 15% of staff by the end of this year, realign structure and operations, and cut operations expenses by over $10 billion next year. Technology shares fell across the globe following underwhelming earnings and fears of a U.S. economic recession grew. Stock markets in Europe, Asia and New York tumbled on Friday.
"Japanese equities suffered their worst day since the Covid-19 pandemic rocked markets in 2020; the Nikkei 225 share index tumbled by 5.8% to its lowest closing level since January," reports The Guardian. "The broader Japanese Topix fell 6.1%, Australia's ASX fell 2.5% and Hong Kong's Hang Seng was down 2.1%."
"Europe's main stock indices also declined on Friday, with European technology stocks falling to their lowest level in more than six months."
"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," CEO Pat Gelsinger said in a press release. "Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies." Those operations and efficiency improvements include plans to lay off over 15% of staff by the end of this year, realign structure and operations, and cut operations expenses by over $10 billion next year. Technology shares fell across the globe following underwhelming earnings and fears of a U.S. economic recession grew. Stock markets in Europe, Asia and New York tumbled on Friday.
"Japanese equities suffered their worst day since the Covid-19 pandemic rocked markets in 2020; the Nikkei 225 share index tumbled by 5.8% to its lowest closing level since January," reports The Guardian. "The broader Japanese Topix fell 6.1%, Australia's ASX fell 2.5% and Hong Kong's Hang Seng was down 2.1%."
"Europe's main stock indices also declined on Friday, with European technology stocks falling to their lowest level in more than six months."
why bring up European and Japanese markets? (Score:1)
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It'll be interesting to see if this pops the AI bubble.
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It'll be interesting to see if this pops the AI bubble.
Why would the struggles of a company that has struggled mightily to jump on the AI bandwagon have any effect on the bandwagon?
Re: why bring up European and Japanese markets? (Score:2)
Because they can't just come out and say "we are now fuckups and years behind Taiwan"
Re:why bring up European and Japanese markets? (Score:4, Insightful)
The Fed can and should do whatever it thinks is best. Whether they drop rates or not at the next meeting, Trump's gonna claim it's about him. If they do drop rates, it'll be "to keep me out of the White House"; if they don't drop rates, it'll be "because they're that scared of me and are hoping to keep their jobs" (as if he has control over that). Then mid-sentence he'll switch to talking about his shoes or hair or something.
The only people who actually listen to his addled ramblings are the ones who're already gonna vote for him regardless.
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It doesn't matter what the Fed does, you'll somehow think it was to benefit the Democrats and hurt Trump. You probably think that about them raising the rates in the first place.
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"leveraging new operating model to improve operating and efficiencies"
Bingo!
Why is Intel a software company? (Score:5, Interesting)
Is that really the correct name for their business?
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Doesn't every software company spend billions on ASML hardware and operate FABs around the world?
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Well, Intel definitely doesn't want people to associate them with Intel's hardware, so ...
'No, that's the other Intel! The one with two "i"s!'
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Is that really the correct name for their business?
hardware is essentially solidified software in this instance...
Stock value (Score:2)
It's absolutely wild how, if you had invested in Intel in 1998 during the height of the dotcom boom, you'd have lost money if you kept your money in their company until now.
Are they really worth less now, than they were then? They might be a great tech company making hardware which is in literally every home in the US, and likely to large degree, many in the world, but it's somewhat insane that they'd be worth less now than then.
I know there's more to a company's value than that, but if I own one share, or
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It's absolutely wild how, if you had invested in Intel in 1998 during the height of the dotcom boom, you'd have lost money if you kept your money in their company until now.
Are they really worth less now, than they were then? They might be a great tech company making hardware which is in literally every home in the US, and likely to large degree, many in the world, but it's somewhat insane that they'd be worth less now than then.
I know there's more to a company's value than that, but if I own one share, or 100 shares, it would certainly look like that.
It makes complete sense when you grasp the idea that the current valuation of any given company's stock reflects the views on the future position of the company and not its present state. You become richer valued and more expensive when everyone thinks your future prospects look amazing, you crater through the floor when your outlook is grim.
I don't think that's exactly true (Score:2)
Intel for example is going to basically shut down their entire GPU division. This means to driver quality is going to go to shit. There isn't a lot of money just yet in the gamer division for Intel but the gamers are basically beta testing Intel's silicon for free or honestly paying for it and then they can take that work and transfer it to the data cente
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It became quite clear that they cant compete against the rent-a-fabs long-term and even short term they had no solution at all in the works that deals with the yield problem.
This is what a fucked company looks like. Intel is the next Motorola.
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It's a good thing the CHIPS act will keep them afloat with your and my tax dollars.
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Corrected that for you.
Comment removed (Score:5, Interesting)
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Oh no, right now I think they're probably aligning to more of wha their potential value is. They've squandered market position for decades through hostile "war chest" approach of hoarding talent and monopolistic price cutting, and they've had inferior products for at least a decade now. AMD caught up and passed them, and they barely noticed until AMD started being able to do volume consistently.
I was merely commenting on how it's crazy that Intel's had a fairly consistently low stock price, which after infl
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If you think Intel should be worth more, buy some and see what happens.
Any near-monopoly that is selling 'shit' will fail over long enough time frames. The only reason to sell ;shit' is because you do not respect your customers. Intel is not about software or hardware, it is about generating cash. They should be laying off the misguided management team at this time, not workers. The fact that the management team is staying says that Intel is a very very bad long term purchase.
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The headline "Intel Stock Drops Toward 50-Year Low Amid Mass Layoffs" is wrong.
"the company's biggest single-day drop since at least 1982" is talking about the 30% price dip. It's not saying that the price dropped to the value 50 years ago, just that the dip has been the largest single-day dip for 50 years.
Re: Stock value (Score:3)
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Did you really, though? It looks like Intel stock split twice since then. Once in 1999, and again in 2000. Even if the price is lower now, you still own 4 times the amount of stock you had in 1998 if you didn't sell. And you REALLY should have sold some in 2000.
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I honestly can't be bothered to go through their dividend history report to run the numbers; but it's definitely enough to make a straight comparison of stock price today to stock price in 1998 with a dash of inflation adjustment an incomplete measure.
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In 1998, Intel's competition was a couple no-names and AMD, then thought of as the budget CPU. Intel enjoyed a sterling reputation for the most part. At that time, I actually got a 1U K6-3 to be stable but it involved lapping the heat spreader and heatsink and fabricating an air duct for the fan.
Now, AMD is solid competition that is actually faster AND cheaper for many real world applications. Intel has had a series of design flaws causing their chips to end up slower than the marketing hype and benchmarks,
I'm sure those layoffs will fix their 13/14th gen (Score:3)
Legalized gambling (Score:4, Funny)
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It's over, TSMC and China have won (Score:2)
Still overvalued (Score:2)
At this time, Intel has nothing, except screw-ups and more screw-ups. Will they recover? That is uncertain.
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should these companies survive at all? (Score:2)
intel isn't unique here. Tech companies have been looking directly at their labor force for a while now as a way to shed costs. There should be a price to pay for this behavior, it's essentially an austerity measure to make the next few quarters sales look good at the expense of the future, after all shedding so much 'talent' is very likely to hurt, or shedding more menial jobs and making your higher value employees do more to compensate. Stock prices SHOULD fall through the floor on these companies. C
Its serious (Score:3)
Declines of this magnitude and speed are always very serious. A buying opportunity will come, but the most likely near term is a short rally, followed by another decline of similar magnitude. In other words, the Friday decline was probably less than half way down.
There is probably more bad news to come over the next few months. But at some point there will be a buying opportunity. It will be when there is general despair about its future. When despair is universal, buy long dated calls, but only with cash you can spare.
Usually, if you own it, in these situations the thing to do is get out immediately. It can go down further and faster than anyone thinks likely, and stay down longer.
Will it recover? Probably, but not certainly. The question is when, and after what else. There is an awful lot of ruin in a company with the size and position of Intel. But sometimes ruin does happen.
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You don't have any low risk alternatives at this point, and emotions color how we think about these things and are very much an obstacle to rational thought.
The thing to focus on is that, whatever you paid for it, what you currently have is what its worth now. If you are in the red due to the current decline, you have lost money, whether you sell or not.
There is no such thing as a "paper loss". What its worth today is all you have, and if that's lower than what you paid, you have lost money. There is als
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I don't know men. I haven't seen intel do anything good in 20 years. It is a company that is coasting on past glory and has not been able to adapt to its competition. core 2 duo was probably the last good product they released. After that, Maybe the gpu integration and revamp 5 years ago was kind of good to stop some GPU sales. But that's about it.
I haven't sold intel stocks, because I don't have any. (And I don't do shorts.) But I think the company will go to 0 in the coming decade.
Intel a Software Company ?!? (Score:2)
Perhaps one of the problems is some in the market think Intel is a software company...
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Since the root cause of the on-chip buck regulators being set to over-voltage in gens 13 & 14 by the microcode, I'd say that Intel is a bad software company.
50-year low? wtf? no (Score:2)
Intel's stock was like at ~$14 bucks in 2005, it's currently 21, that's nowhere near its 50 year low.
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Don't anyone panic! (Score:2)
Ass-backwards (Score:2)
Grove (Score:2)
RIP Andy Grove. Lose the founders, lose the vision.
State of Oregon (Score:2)
The elite say oh noes and the legislature gives the people's money to her and Oregon says fuck us more please. We love keeping this burning trash heap going fer local jerb and important friends and influence! It's our silicon money tree! It's burnt up and has no needles, but hey, prestige name, right? Tech empire. Woo.