Intel: Turn Off The Lights

Seeking Alpha08-02

Intel Corporation continues to struggle, missing the AI GPU transition and focusing on the foundry business, leading to disappointing financial results.Their Q3 guidance was very weak, with Nvidia now...

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ICEsh00ter
08-02
ICEsh00ter
fire the CEO now

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the foundry business, leading to disappointing financial results.Their Q3 guidance was very weak, with Nvidia now...</p>\n\n<a href=\"https://seekingalpha.com/article/4709445-intel-turn-off-the-lights\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2458330243.SGD","symbol_name":"FRANKLIN SHARIAH TECHNOLOGY \"A-H1\" (SGDHDG) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4709445-intel-turn-off-the-lights","article_id":"2456492774","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2456492774","pubTimestamp":1722603600,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Intel Corporation continues to struggle, missing the AI GPU transition and focusing on the foundry business, leading to disappointing financial results.Their Q3 guidance was very weak, with Nvidia 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for shareholders, especially with no turnaround in sight.DMP/E+ via Getty ImagesThe numbers just keep getting worse for Intel Corporation (NASDAQ:INTC). The giant chip company missed the AI GPU transition and is too focused on building a foundry business to catch up, despite aggressively spending on new foundries. My investment thesis remains ultra-bearish on Intel following another bad quarter and the elimination of the once-important dividend.Source: FinvizAnother Major DisappointmentIntel not only reported a Q2 '24 miss on both the bottom and top line, but the company substantially lowered the targets for Q3.Source: Seeking AlphaThe chip company guided to Q3 revenues of only $12.5 to $13.5 billion, below analyst targets of $14.4 billion. NVIDIA Corporation (NVDA) is now set to report quarterly revenues topping $28 billion as the AI chip leader leaves Intel in the dust with double the sales total.Intel reported Q2 data center revenues of only $3.0 billion, with a limited operating income of $0.3 billion. AI data center spending is exploding, and Intel isn't capturing anything material in this area.Source: Intel Q2'24 presentationAt the same time, AI PCs could pressure the Client Group, where Intel is still strong. The company is forecasting AI PCs on a path to top 40 million units shipping in 2024, while QUALCOMM Incorporated (QCOM) is suddenly a top competitor in this sector, having already launched AI PCs in June.Intel still has a $7.4 billion quarterly sales business, which is more at risk now. AI PCs appear to open up more competition where the former chip giant either maintains revenues, or losses out in the future.No Turnaround In SightA turnaround just doesn't appear in sight under the scenario where Intel is slashing spending. The chip company is now guiding to a small loss in Q3 due to weak gross margins of only 38%.Despite booming compute power demand, Intel now has to cut expenses by more than $10 billion. The company is slashing the workforce topping 100K by 15%, which is almost unheard of in a sector with booming demand.Source: Q2'24 presentationWhile cutting employees isn't ideal, the company isn't investing enough in capital spending to ever catch up to Taiwan Semiconductor Manufacturing Company Limited (TSM). Intel is now guiding gross capital spending in 2024 of $25 to $27 billion, with the amount dipping to only $20 to $23 billion in 2025. Not to mention, Intel is only spending ~$12 billion each year due in part to investment partners which get a cut of future profits.As a comparison, TSMC plans to spend at least $30 billion in capital this year. The chip foundry leader is highly unlikely to reduce spending in the future, while struggling to keep up with soaring demand. Intel will be hard-pressed to catch up with TSMC chip manufacturing via spending less than the leader and with most large customers in the U.S. already using TSMC and competing directly with Intel on chip design.The last major blow to many long-time investors is that the company will suspend the dividend. One has to worry Intel is being forced to lower capital spending due to liquidity issues. The company was still spending $1 billion per quarter on dividends, even though Intel cut the dividend in early 2023.The chip company definitely shouldn't be paying out $4 billion in annual dividends when heavily spending for the future. Intel has over $29 billion in cash and short-term investments, but the debt balance is now up to $53 billion. The company would have to take on additional debt to pay out the dividends, with guidance for limited to no cash flow generation.The negative overhang of cutting the dividend will hurt the stock for a while. Intel had a market cap topping $120 billion heading into earnings, and investors shouldn't have much confidence in the business improving with the disruptions from so many employees leaving the company.TakeawayThe key investor takeaway is that Intel Corporation is far away from a turnaround. The company faces a major disruption from 15% of the workforce being let go while competitors are full speed ahead.Investors should've dumped in the stock on prior warnings, though now still isn't too late with profits disappearing and competitors only getting stronger.Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":334118636490776,"gmtCreate":1722605229281,"gmtModify":1722605233182,"author":{"id":"3568262728204718","authorId":"3568262728204718","name":"ICEsh00ter","avatar":"https://static.tigerbbs.com/e8d9d76c266e1d33abd00a525a8a445c","vip":1,"crmLevel":6,"crmLevelSwitch":1,"authorIdStr":"3568262728204718","idStr":"3568262728204718"},"htmlText":"fire the CEO now","listText":"fire the CEO now","text":"fire the CEO now","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/334118636490776","repostId":2456492774,"repostType":4,"repost":{"id":"2456492774","pubTimestamp":1722603600,"share":"https://ttm.financial/m/news/2456492774?lang=&edition=fundamental","pubTime":"2024-08-02 21:00","market":"us","language":"en","title":"Intel: Turn Off The Lights","url":"https://stock-news.laohu8.com/highlight/detail?id=2456492774","media":"Seeking Alpha","summary":"Intel Corporation continues to struggle, missing the AI GPU transition and focusing on the foundry business, leading to disappointing financial results.Their Q3 guidance was very weak, with Nvidia now","content":"<html><head></head><body><ul style=\"\"><li><p>Intel Corporation continues to struggle, missing the AI GPU transition and focusing on the foundry business, leading to disappointing financial results.</p></li><li><p>Their Q3 guidance was very weak, with Nvidia now doubling the sales of Intel.</p></li><li><p>The Intel dividend suspension should be the last straw for shareholders, especially with no turnaround in sight.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/eed0b0dab8aaa552ca44853e9c0c0da0\" alt=\"DMP/E+ via Getty Images\" title=\"DMP/E+ via Getty Images\" tg-width=\"750\" tg-height=\"396\"/><span>DMP/E+ via Getty Images</span></p><p>The numbers just keep getting worse for <strong>Intel Corporation</strong> (NASDAQ:INTC). The giant chip company missed the AI GPU transition and is too focused on building a foundry business to catch up, despite aggressively spending on new foundries. My investment thesis remains ultra-bearish on Intel following another bad quarter and the elimination of the once-important dividend.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/4d07c2d0dbf2af3750089435a61256d8\" alt=\"Source: Finviz\" title=\"Source: Finviz\" tg-width=\"1280\" tg-height=\"440\"/><span>Source: Finviz</span></p><h2 id=\"id_4057127013\">Another Major Disappointment</h2><p>Intel not only reported a Q2 &#39;24 miss on both the bottom and top line, but the company substantially lowered the targets for Q3.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/756c10510b878066c74bdd9d034f99ec\" alt=\"Source: Seeking Alpha\" title=\"Source: Seeking Alpha\" tg-width=\"640\" tg-height=\"233\"/><span>Source: Seeking Alpha</span></p><p>The chip company guided to Q3 revenues of only $12.5 to $13.5 billion, below analyst targets of $14.4 billion. <strong>NVIDIA Corporation</strong> (NVDA) is now set to report quarterly revenues topping $28 billion as the AI chip leader leaves Intel in the dust with double the sales total.</p><p>Intel reported Q2 data center revenues of only $3.0 billion, with a limited operating income of $0.3 billion. AI data center spending is exploding, and Intel isn&#39;t capturing anything material in this area.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8b7673ce42d9ccb2ffb968a7e22bb9f8\" alt=\"Source: Intel Q2&#39;24 presentation\" title=\"Source: Intel Q2&#39;24 presentation\" tg-width=\"640\" tg-height=\"358\"/><span>Source: Intel Q2&#39;24 presentation</span></p><p>At the same time, AI PCs could pressure the Client Group, where Intel is still strong. The company is forecasting AI PCs on a path to top 40 million units shipping in 2024, while <strong>QUALCOMM Incorporated</strong> (QCOM) is suddenly a top competitor in this sector, having already launched AI PCs in June.</p><p>Intel still has a $7.4 billion quarterly sales business, which is more at risk now. AI PCs appear to open up more competition where the former chip giant either maintains revenues, or losses out in the future.</p><h3 id=\"id_790448792\">No Turnaround In Sight</h3><p>A turnaround just doesn&#39;t appear in sight under the scenario where Intel is slashing spending. The chip company is now guiding to a small loss in Q3 due to weak gross margins of only 38%.</p><p>Despite booming compute power demand, Intel now has to cut expenses by more than $10 billion. The company is slashing the workforce topping 100K by 15%, which is almost unheard of in a sector with booming demand.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/d46ed7f6eadb12d7051fd3b9a94394e3\" alt=\"Source: Q2&#39;24 presentation\" title=\"Source: Q2&#39;24 presentation\" tg-width=\"640\" tg-height=\"350\"/><span>Source: Q2&#39;24 presentation</span></p><p>While cutting employees isn&#39;t ideal, the company isn&#39;t investing enough in capital spending to ever catch up to <strong>Taiwan Semiconductor Manufacturing Company Limited</strong> (TSM). Intel is now guiding gross capital spending in 2024 of $25 to $27 billion, with the amount dipping to only $20 to $23 billion in 2025. Not to mention, Intel is only spending ~$12 billion each year due in part to investment partners which get a cut of future profits.</p><p>As a comparison, TSMC plans to spend at least $30 billion in capital this year. The chip foundry leader is highly unlikely to reduce spending in the future, while struggling to keep up with soaring demand. Intel will be hard-pressed to catch up with TSMC chip manufacturing via spending less than the leader and with most large customers in the U.S. already using TSMC and competing directly with Intel on chip design.</p><p>The last major blow to many long-time investors is that the company will suspend the dividend. One has to worry Intel is being forced to lower capital spending due to liquidity issues. The company was still spending $1 billion per quarter on dividends, even though Intel cut the dividend in early 2023.</p><p>The chip company definitely shouldn&#39;t be paying out $4 billion in annual dividends when heavily spending for the future. Intel has over $29 billion in cash and short-term investments, but the debt balance is now up to $53 billion. The company would have to take on additional debt to pay out the dividends, with guidance for limited to no cash flow generation.</p><p>The negative overhang of cutting the dividend will hurt the stock for a while. Intel had a market cap topping $120 billion heading into earnings, and investors shouldn&#39;t have much confidence in the business improving with the disruptions from so many employees leaving the company.</p><h2 id=\"id_3769692796\">Takeaway</h2><p>The key investor takeaway is that Intel Corporation is far away from a turnaround. The company faces a major disruption from 15% of the workforce being let go while competitors are full speed ahead.</p><p>Investors should&#39;ve dumped in the stock on prior warnings, though now still isn&#39;t too late with profits disappearing and competitors only getting stronger.</p><p>Editor&#39;s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Intel: Turn Off The Lights</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIntel: Turn Off The Lights\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-02 21:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4709445-intel-turn-off-the-lights><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Intel Corporation continues to struggle, missing the AI GPU transition and focusing on the foundry business, leading to disappointing financial results.Their Q3 guidance was very weak, with Nvidia now...</p>\n\n<a href=\"https://seekingalpha.com/article/4709445-intel-turn-off-the-lights\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU2458330243.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A-H1\" (SGDHDG) ACC","BK4573":"虚拟现实","BK4561":"索罗斯持仓","IE0005OL40V9.USD":"JANUS HENDERSON BALANCED \"A6M\" (USD) INC","BK4581":"高盛持仓","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","SG9999004220.SGD":"Nikko AM Shenton Asia Dividend Equity Fund  SGD","LU0081259029.USD":"UBS (LUX) EQUITY FUND - TECH OPPORTUNITY \"P\" (USD) ACC","LU1917777945.USD":"安联专题基金Cl AT Acc","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0048584097.USD":"FIDELITY FUNDS  GLOBAL THEMATIC OPPORTUNITIES \"A\" (USD) INC","LU1974910355.USD":"Allianz Thematica Cl AMg DIS USD","IE00B5949003.HKD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A\" (HKD) ACC","BK4551":"寇图资本持仓","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","LU2491050154.USD":"WELLINGTON SUSTAINABLE OUTCOMES \"A\" (USD) ACC","BK4529":"IDC概念","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU1069344957.HKD":"AB SICAV I - AMERICAN GROWTH PORTFOLIO \"AD\" (HKD) INC","LU1282649810.SGD":"Allianz Asian Multi Income Plus Cl AMg DIS H2-SGD","LU1046421795.USD":"富达环球科技A-ACC","IE00B19Z8W00.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH \"A\" INC","BK4515":"5G概念","LU2458330169.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A\" (SGD) ACC","BK4567":"ESG概念","LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","LU0541501648.USD":"ALLSPRING  EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU2237443622.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc USD","BK4575":"芯片概念","LU0072462426.USD":"贝莱德全球配置 A2","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU2237443978.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A Acc SGD-H","LU1282649067.USD":"ALLIANZ ASIAN MULTI INCOME PLUS \"AMG\" (USD) INC A","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","LU0109392836.USD":"富兰克林科技股A","INTC":"英特尔","BK4527":"明星科技股","BK4579":"人工智能","LU1119994496.HKD":"FIDELITY WORLD \"A\" (HKD) ACC","LU2125154778.USD":"ALLSPRING GLOBAL EQUITY ENHANCED INCOME \"A\" (USD) INC","BK4550":"红杉资本持仓","LU2237443549.SGD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA SGD-H","BK4141":"半导体产品","IE00B4JS1V06.HKD":"JANUS HENDERSON BALANCED \"A2\" (HKD) ACC","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD"},"source_url":"https://seekingalpha.com/article/4709445-intel-turn-off-the-lights","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2456492774","content_text":"Intel Corporation continues to struggle, missing the AI GPU transition and focusing on the foundry business, leading to disappointing financial results.Their Q3 guidance was very weak, with Nvidia now doubling the sales of Intel.The Intel dividend suspension should be the last straw for shareholders, especially with no turnaround in sight.DMP/E+ via Getty ImagesThe numbers just keep getting worse for Intel Corporation (NASDAQ:INTC). The giant chip company missed the AI GPU transition and is too focused on building a foundry business to catch up, despite aggressively spending on new foundries. My investment thesis remains ultra-bearish on Intel following another bad quarter and the elimination of the once-important dividend.Source: FinvizAnother Major DisappointmentIntel not only reported a Q2 '24 miss on both the bottom and top line, but the company substantially lowered the targets for Q3.Source: Seeking AlphaThe chip company guided to Q3 revenues of only $12.5 to $13.5 billion, below analyst targets of $14.4 billion. NVIDIA Corporation (NVDA) is now set to report quarterly revenues topping $28 billion as the AI chip leader leaves Intel in the dust with double the sales total.Intel reported Q2 data center revenues of only $3.0 billion, with a limited operating income of $0.3 billion. AI data center spending is exploding, and Intel isn't capturing anything material in this area.Source: Intel Q2'24 presentationAt the same time, AI PCs could pressure the Client Group, where Intel is still strong. The company is forecasting AI PCs on a path to top 40 million units shipping in 2024, while QUALCOMM Incorporated (QCOM) is suddenly a top competitor in this sector, having already launched AI PCs in June.Intel still has a $7.4 billion quarterly sales business, which is more at risk now. AI PCs appear to open up more competition where the former chip giant either maintains revenues, or losses out in the future.No Turnaround In SightA turnaround just doesn't appear in sight under the scenario where Intel is slashing spending. The chip company is now guiding to a small loss in Q3 due to weak gross margins of only 38%.Despite booming compute power demand, Intel now has to cut expenses by more than $10 billion. The company is slashing the workforce topping 100K by 15%, which is almost unheard of in a sector with booming demand.Source: Q2'24 presentationWhile cutting employees isn't ideal, the company isn't investing enough in capital spending to ever catch up to Taiwan Semiconductor Manufacturing Company Limited (TSM). Intel is now guiding gross capital spending in 2024 of $25 to $27 billion, with the amount dipping to only $20 to $23 billion in 2025. Not to mention, Intel is only spending ~$12 billion each year due in part to investment partners which get a cut of future profits.As a comparison, TSMC plans to spend at least $30 billion in capital this year. The chip foundry leader is highly unlikely to reduce spending in the future, while struggling to keep up with soaring demand. Intel will be hard-pressed to catch up with TSMC chip manufacturing via spending less than the leader and with most large customers in the U.S. already using TSMC and competing directly with Intel on chip design.The last major blow to many long-time investors is that the company will suspend the dividend. One has to worry Intel is being forced to lower capital spending due to liquidity issues. The company was still spending $1 billion per quarter on dividends, even though Intel cut the dividend in early 2023.The chip company definitely shouldn't be paying out $4 billion in annual dividends when heavily spending for the future. Intel has over $29 billion in cash and short-term investments, but the debt balance is now up to $53 billion. The company would have to take on additional debt to pay out the dividends, with guidance for limited to no cash flow generation.The negative overhang of cutting the dividend will hurt the stock for a while. Intel had a market cap topping $120 billion heading into earnings, and investors shouldn't have much confidence in the business improving with the disruptions from so many employees leaving the company.TakeawayThe key investor takeaway is that Intel Corporation is far away from a turnaround. The company faces a major disruption from 15% of the workforce being let go while competitors are full speed ahead.Investors should've dumped in the stock on prior warnings, though now still isn't too late with profits disappearing and competitors only getting stronger.Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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