Intel Just Got Pounded For Not Taking AMD Seriously Enough

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31 Jan 2023

Microsoft CEO Satya Nadella recently said the tech industry was unforgiving to companies that do not adapt to change.

Apparently, Intel never received that message, which cost the company billions in its market cap after investors punished it for not taking its competition seriously enough, particularly AMD, which has been slowly eroding team blue's apparent monopoly in the personal computers industry.

Team blue laid bare its earnings this past week, and the results both shocked and underwhelmed investors who responded by wiping $8 billion off of the company's market value and creating a new headache for CEO Pat Gelsinger, who himself took the helm just a couple of years ago to help Intel course correct.

Results showed that the company generated $14 billion in fourth-quarter 2022 revenue, down 32% year over year, and posted a net loss of $664 million, or 16 cents per share, for the closing months of 2022, sliding into the red territory after booking a profit of $4.62 billion, or $1.13 per share, in the same quarter of 2021.

Full-year 2022 results weren't any better: revenue dropped 20% year-over-year to $63.1 billion, while profit was down a whopping 60% to $8 billion, or $1.94 per share.

Most alarming though was the drop in revenue in Intel's Client Computing Group, or CCG, a business unit that is responsible for producing desktop processors, such as the recent 13th Gen line of products. And well, we'll just let the results do the talking…


HOLY F*CK THE CCG BUSINESS UNIT SAW THE MOST DECLINE IN REVENUE AMONGST ALL BUSINESS DIVISIONS

Could one really blame Intel for not taking AMD seriously enough? It's true that AMD had all but disappeared from the personal computers industry during the early 2000s to late 2010s period for failing to invent functional products, but it's also true that Intel got lazy after becoming the undisputed king of processors during that period.

Maybe Intel thought AMD would fumble yet again after the 2017 launch of the Ryzen series processors and it would continue to dominate the market in an "I told ya so" moment — except, that team red hasn't, and with every subsequent processor launch, its products have gotten cheaper and better.

Could this be Intel's watershed moment? Who's to say? So far, all manners of analysts on Wall Street have cut their price targets on the company's stock given both the earnings result and the bleak picture CEO Pat Gelsinger has painted for the immediate future.

Should Intel's stock price reverse its downward trend, we'll let you know.


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And that's a wrap! Don't forget to share this newsletter with your family and friends!

See y'all next week. PEACE! ☮️

— Sheharyar Khan, Editor, Business Tech @ HackerNoon