In a move that mirrors Tesla Inc's TSLA dramatic workforce reduction earlier this year, Intel Corp INTC reportedly plans to slash 15% of its workforce.
As a tech reporter going back over 40 years, it's incredible to be writing this. But can Intel (NASDAQ: INTC ) survive?
"The Wall Street Journal" called Intel too big to fail. Its most recent earnings report, however, was a pretty big fail.
After an active return of almost +31% on my previous 'Sell' view on Intel, I am maintaining my bearish stance post Q2 FY24 results: Intel investors face a potential long term FCF bleed, as the company is not expected to be FCF-positive for the next 4 years. I believe investors should skip management's turnaround and transformation pitch and instead focus on evaluating the results.
Intel's recent poor performance led to a downgrade from a strong buy to hold, with missed expectations and dividend suspension surprising investors, including myself. Layoffs and struggles to keep pace in the semiconductor market may be indicating deeper issues within Intel's management and execution capabilities. Despite potential government funding and opportunities in the AI market, Intel's ability to execute on their turnaround strategy remains uncertain, leading to a cautious hold on shares.
Intel's stock has plummeted this year as its losses have been piling up. The company's sales also haven't been strong, and they declined by 1% last quarter.
Intel's restructuring, though painful, is necessary due to efficiency and productivity concerns. The Intel client group continued to perform well despite concerns about its competitiveness against ARM and AMD; I believe this is a bit overstated. Intel Foundry losses, while a short-term pain for investors, are a long-term value creation opportunity for patient investors.
Dismal quarterly results have made Intel's stock too expensive for now. AMD is a better value and just posted encouraging earnings.
A sell-off wiped off nearly $1 trillion in value from the seven most prominent tech companies. As a result, some of them -- like Nvidia -- are trading at an excellent valuation.
The chips are down as never before for Intel INTC -3.81%decrease; red down pointing triangle. But in 2024, even a greatly diminished semiconductor manufacturer may be too big to fail.
Comprised of the 503 largest U.S. companies based on market capitalization, the S&P 500 continues to be the yard stick by which most professional investors and traders measure their returns and performance. Year-to-date, the index is up a healthy 11%.
Intel is postponing one of its major conferences until next year. The postponement of the Intel Innovation event comes as the company is making moves to dramatically reduce costs.