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Intel

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."
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Intel Stock Drops Toward 50-Year Low Amid Mass Layoffs

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  • I understand the corporate bullshit talk of "leveraging new operating model to improve operating and efficiencies" to cover up crashing CPUs due to overvoltage and dye oxidations. Why did they have to hide their failures further by bringing up the whole global markets?
  • by HBI ( 10338492 ) on Friday August 02, 2024 @04:54PM (#64676544)

    Is that really the correct name for their business?

    • by Tailhook ( 98486 )

      Doesn't every software company spend billions on ASML hardware and operate FABs around the world?

    • 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!'

    • Is that really the correct name for their business?

      hardware is essentially solidified software in this instance...

  • 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

    • by dnaumov ( 453672 )

      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.

      • It makes sense for people to think about the future but that's not what they're doing here. This is an extremely short-sighted and short-term reaction.

        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
        • The part you are missing is that Intel has been clearly fucked since Zen 1.

          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.
        • If you really think this is short term, you should be contacting your broker instead of posting on /. about how it's going to be. You could make a lot of money if you'd only put it where your mouth (or maybe thumbs as it were) is.

          It's a good thing the CHIPS act will keep them afloat with your and my tax dollars.
      • It makes complete sense when you grasp the idea that the current valuation of any given company's stock reflects the views of the market participants (people with money) on the future position of the company's stock valuation (and perhaps dividend payouts) and not its present state.

        Corrected that for you.

    • Comment removed (Score:5, Interesting)

      by account_deleted ( 4530225 ) on Friday August 02, 2024 @05:48PM (#64676660)
      Comment removed based on user account deletion
      • by CAIMLAS ( 41445 )

        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

      • 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.

    • 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.

    • Well, you'd have gotten quarterly dividends. That's the real power of stock - your money works for you.
    • by leonbev ( 111395 )

      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.

    • It's worth remembering that(typically; not doing so was one of the unpleasant announcements) Intel pays dividends.

      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.
    • by sjames ( 1099 )

      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,

  • by ffkom ( 3519199 ) on Friday August 02, 2024 @06:32PM (#64676728)
    What else to do when you sold two generations of unstable CPUs, refused RMAs of those, and now the shit hits the fan because nobody is believing your lame excuses anymore? Surely firing lots of engineers will somehow make those hardware defects and quality issues magically go away! (At least once the last employee is out the door, no more mistakes will be made, that much is for sure.)
  • by DaFallus ( 805248 ) on Friday August 02, 2024 @07:21PM (#64676800)
    Yesterday I saw someone on r/walstreetbets say they bought $750k worth of Intel stock and others were talking about placing puts.
  • TSMC and China are now the tech center of the world. It's only a matter of time until software production moves offshore. Especially since the CrowdStrike drama. More and more people are looking for an exit.
  • At this time, Intel has nothing, except screw-ups and more screw-ups. Will they recover? That is uncertain.

  • 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

  • by Budenny ( 888916 ) on Friday August 02, 2024 @10:45PM (#64677042)

    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.

    • by godrik ( 1287354 )

      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.

  • Perhaps one of the problems is some in the market think Intel is a software company...

    • Shares plunged as much as 30% on Friday, its biggest single-day drop since at least 1982, according to Bloomberg data.
    • 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.
    • 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.

  • Intel's stock was like at ~$14 bucks in 2005, it's currently 21, that's nowhere near its 50 year low.

    • I think the article is trying to talk about biggest single day drop, because it mentions it was the biggest drop since 1982. But not only isn't that 50 years either, it is as you say also wrong. In the 80's (for example) the stock was less than a dollar. I can't go 50 years back.
      • you're forgetting about stock splits. Still even accounting for splits the stock was at 18.25 in 1986. Further it was 12.76 in 2009 so the article is just wrong. The longest chart I can find only goes back 44 years, so I don't know about the 70's either. According to one internet source the ipo was at 23.50 in 1972. If that is accurate, its very nearly flat for the entire 52 year history of public trading, and strongly negative once you account for inflation.
  • Rest assured that the top management will be getting their bonuses all right.
  • This feels like the absolute wrong move to fix their actual manufacturing issues. Their revenue is down for multiple reasons, but the one they could actually fix is their CPU burnout problem, and sort out their "nothing we sell has a valid warranty" where they fight every RMA. Just doing a bunch of layoffs won't fix either, it will just make both issues even worse. They obviously need to up their manufacturing QA process too, these burnout chips should have never made it the shelf. Firing the people who cou
  • RIP Andy Grove. Lose the founders, lose the vision.

  • 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.

Those who do things in a noble spirit of self-sacrifice are to be avoided at all costs. -- N. Alexander.

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