Intel’s stock dropped around 30% overnight, shaving some $39 billion from the company’s market capitalization since rumors of a pending layoff first emerged. The devastating results come after the chip giant reported a loss for the second quarter, complained about yield issues with the Meteor Lake CPU, provided a modest business outlook for the next few quarters, and announced plans to lay off 15,000 people worldwide.
When the NYSE closed on July 31, Intel’s market capitalization was $130.86 billion. Then, a report about Intel’s massive layoffs was published, and the company’s market capitalization dropped sharply to $123.96 billion on August 1. Following Intel’s financial report yesterday, the company’s capitalization dropped to $91.86 billion. Essentially, Intel has lost half of its capitalization since January. As of now, Intel’s market value is a fraction of Nvidia’s worth and less than half of AMD’s.
As Intel’s actions look rather desperate, analysts believe that Intel’s challenges are existential. “Intel’s issues are now approaching the existential,” Stacy Rasgon, an analyst with Bernstein, told Reuters.
Smart people saw this coming.
Sanctions were supposed to stop China’s semiconductor industry. The opposite happened.
China is definitely going to replace the US as the next empire if they play their cards right. It just sucks that the population is so socially oppressed to the point it may break them if they encounter an adverse phenomenon they can’t adapt to.
Which population is socially oppressed? I understood it as the West’s but I need to confirm who you meant.
Both fo sho
The moment Arm decided it should follow the Huawei ban, China started to invest in their own silicon at a staggering rate. After all, Apple already proved you can start a CPU design from scratch and be fine while Risc-V already offered a royalty free architecture to base their work off.
I know GamersNexus has also covered Chinese CPUs based on x86. I forget the details, maybe AMD let them license their IP?
if your internationally sanctioned IP suddenly means a lot less, what is the US going to do? sanction them?
Well, the purpose of this project is independence from US silicon and Arm. The purpose isn’t for international export.
that’s the point, there is nothing the US can do
Sanctions were never supposed to stop china’s semiconductor industry. They were to stop/slow down China from acquiring chips short term. This is quite a strawman argument.
They didn’t slow China.
Again, sanctions were on chips and import lithography. They have lots of trouble importing Nvidia chips, or at least more cost. Of course the country where a lot of chips are made will continue making chips. But while Taiwan was putting 3nm chips in phones a year ago, China is producing 5nm headlines, chips on mass scale yet to be seen.
What did people expect, China to go back to the stone age?
Intel doesn’t even make 5nm chips. SMIC is making 5nm chips less than 2 years after the sanctions that were meant to stop at 14nm.
You can spin this all you want.
Intel? The company that’s been failing for 5 years and lost 30% of it value in one day? That Intel?
Ni hao, comrade.
The one that ran-off with taxpayers’ money, yes.
rust giveth, and rust taketh away
My MSCI World ETF shares lost about 4% in a day. yesterday. Does this have anything to do with this shitshow?
Doubt it. The ETF holds 1500 large and mid-cap companies across 23 developed countries. It doesn’t hold enough Intel shares.
Wasn’t the market down overall yesterday.
Yes, it was. Tech led the downturn yesterday, but Nasdaq was only down like 2%. The “world” stocks (ex-US) are more volatile than the US. In my opinion (and Warren Buffett’s), they are not worth investing in as ETFs. Only particular companies. The markets are genuinely worse than in the US.
These fucking idiots. All they had to do was pretend they gave a fuck about the chip debacle and play everything slowly. They couldn’t even do that. They couldn’t even pretend to give a fuck about anyone. Neither their customers nor their employees.
If they replaced the C-suite with the custodial staff, they would be in a significantly better position than they are now. Executives are always dumb as fuck, with very few exceptions. Pre-requisites for the job: narcisism, sociopathy and idiocy.
That’s communism.
Lot’s of isms
Like stupidism!
If they replaced the C-suite with the custodial staff, they would be in a significantly better position than they are now. Executives are always dumb as fuck, with very few exceptions. Pre-requisites for the job: narcisism, sociopathy and idiocy.
Are we still talking about Intel, or…?
The funny thing is that there are executives who know what they’re doing, but they may be outvoted by people who failed upward due to connections or a “good background” (ivy league, internship, etc.).
I always thought “what does a brand name education prove?” This isn’t the 1800s. Community college now is almost as good as Harvard was in the 1800s. Back then, just being able to read meant that you were educated.
Also, what does an internship prove? You know how to carry 8 coffees at once? You can wear a cheap suit? No, it’s all cover for connections. If businesses wanted the best people (say the top 10%) you could literally just set up a table outside a subway station and interview random commuters, getting probably 10 good prospects in a day.
Ivy League, internships etc. prove exactly what you are critizising. They prove to have the connections. They prove to be part of the in-group. They prove that you will defend your class interests against the lower classes. And if you are one of the very few people who achieve upwards class mobility, they prove that you will be betraying them.
This is not about running the best company or running the best economy. It is about maintaining class power and privilege.
This is not about running the best company or running the best economy. It is about maintaining class power and privilege.
I understand your point, but neo-marxist perspectives like this fundamentally misunderstand what companies care about (for obvious reasons). No company cares about “class power” or “privilege” because shareholders only care about their own money.
Their “class” is not important when it comes to investing. If they could fire all the nepo babies and use AI instead, they would do it in 1 second.
Their “class” is not important when it comes to investing. If they could fire all the nepo babies and use AI instead, they would do it in 1 second.
Firing the nepo babys remains consistent with being the owning class. And they put the nepo babies so they dont have to put rising middle and lower class people there.
It’s not. Investors literally only care about money.
Rich people don’t have “class consciousness” because they all want to be better and richer than other rich people. That’s what “keeping up with the Joneses” (or Kardashians) is. You don’t want the Joneses to improve, because that hurts you.
It’s a zero-sum game at the top. If your neighbor buys a Mercedes, you need to buy a Maserati. Like I said, neo-marxism fundamentally misunderstands rich people.
I think you misunderstand rich people. Why do you think they make PACs? Why do you think they make Ivy Leagues and send their kids there? Why do you think they keep up all these illusions. Do you think they are too stupid to realize that you can get an equivalent education for a fraction of that money?
Rich people don’t think these things consciously. The wealthy don’t think, “How can I best ensure the worker class remains oppressed?” They simply act selfishly, and their actions together with the actions of other selfish people lead naturally to oppression.
Until they get wealthy enough to buy politicians, at which point it does consciously become “How can I best ensure the worker class remains oppressed?”
It took long enough for the market to wake up to it. They dragged their ass for what like 10 years without much real innovation. And everyone knew it the whole time. Then Apple ditched them. That alone should have been a huge sign. Apple does not fuck around. They definitely knew Intel had been rotting from the inside out.
Apple likes to control the entire ecosystem, and wanted to make their own processors to make them more efficient and produce less heat. They succeeded too, the M2 and M3 chips are incredible.
So I think they would have ditched anyone, but Intel probably also made it easier by being so bad. :)
You are 200% correct, apple didn’t ditch Intel because Intel, apple did it because apple.
more efficient and produce less heat
Which was impossible to do with x86 space heater. Maybe if Intel hadn’t sat idle and actually produced more efficient design. We could be reading about Apples own spin of x86 instead of ARM.
Fucking good! I know it’s not the primary reason, but it’s by high time that people see laying off 15k people as a bad thing and the company suffering for it.
I fear it’s wishful thinking that the layoffs are what made the stock tank. It’s certainly never hurt anyone else…
layoffs are what made the stock tank
Yeah, it’s usually the opposite: Layoffs by themselves usually make the stock go up, as the company is reducing their expenses.
The issue with Intel is that they announced layoffs combined with a bad earnings call, so it’s a sign the company isn’t going so well.
The layoffs were announced at the same time as Intel’s Q2 financial results: https://www.intel.com/content/www/us/en/newsroom/news/actions-accelerate-our-progress.html
The actions we are taking will make Intel a leaner, simpler and more agile company.
Oof, now agile bullshit talk is infecting the lingo of the c-suite and being used as justification to do layoffs. I should’ve seen that coming, though I must’ve skipped the portion of the agile manifesto that said to choose Lamborghinis over employees.
Yep, that’ll do it.
They’re not even bothered by the fucked up chips.
I was gonna say… how is it not this? Weird world.
I’m guessing those chips are a tiny fraction of Intel’s revenue.
AMD have been eating their lunch on more than just gaming PCs.
yet
I think it made an already bad situation worse.
I think the AI thing has really caught them off guard. There’s a gold rush and they have no real shovels to sell.
Intel’s only hope now is for the Chinese army to go for a holiday in Taiwan. Their competitors are hugely reliant on TSMC. That’s been brewing forever though, and hopefully will continue to not come to anything. The last thing the world needs right now is more fucking war…
After how horribly they handled the whole hardware defect scandal with their 13th and 14th gen i Series processors, this is 100% deserved.
Intel is a cautionary tale of what happens when you allow bean counters who care more about EBITDA than their customers and staff to run the show.
This sounds like a modern day version of the Schlitz mistake back in the seventies where they cut the quality so much, so fast, that the formerly largest brewery in America became a worthless brand that nobody trusted.
The b-school lesson from this was to drop the quality of your product more slowly so people wouldn’t notice.
I figured no big company would ever suffer consequences from shitty product ever again because they’d figured out the drip instead of the open floodgates.
I hope more companies get to enjoy this fate, especially food producers.
The corruption drips slowly inside as well.
I wonder if that guy who bet his inheritance from WallStreetBets is ok…
As someone with no inheritance now or ever, it’s hard for me to imagine it has anything but fuck around money. I’m sure he’s fine.
Like he’ll be fine but psychologically thats gotta be tuff. Shoulda thrown it in index funds or some guranteed instrument
SOXX
Ugh, I hope Loongson becomes competitive soon. If AMD gets a monopoly, cpu technology is going to get stagnant. And not decrease in cost.
The x86-64 CPU market has felt stagnant for a while. The real innovation seems to be happening with ARM and mobile. In which Intel is way behind. Might explain some of the news from today.
It’s true, but Intel fucked around for years and now they’re finding out. I’m happy to watch them stew for a year or so before getting back on their feet.
They definitely deserve this. Still, I hope their fab business works out because we need another high end fab (especially a US based one). It’s exorbitantly expensive, too much for anyone but an established player to enter the market.
More than that, for years their CPUs have been eating more and more watts and the electricity prices went up… Just keep them on par with AMD CPUs… But still , most default to Intel…
But surely the desktop PC market is going to bounce back soon
Any day now
They’re still around, and will be for business, gaming etc for a long time. The desktop isn’t going away.
Maybe they shouldn’t have fucked over all of their own people.
Fuck em
So, I should invest now for cheap and when they inevitably bounce back, sell?
Don’t try to catch a falling knife
But Ive had success in the past, just look at these cool scars as proof :)
I bought some more; stupid me thought it would keep going up (up 15%), then it bombed.
Yeah, go for it 😎
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Nothing ever goes wrong taking “free money” advice
I make sure to take all my financial advice from strangers on the Internet. Nothing could be safer.
Intel should merge with Boeing
