July 25 – Intel (NASDAQ:INTC) shook markets on Friday, shedding more than 7% share value in pre-market trading after its Q2 report revealed a $2.9 billion loss and plans to cut over 25,000 jobs by year?end. Revenue came in at $12.9 billion, slightly above estimates, but the company warned of deeper losses ahead and set Q3 revenue guidance between $12.6 billion and $13.6 billion.
New CEO Lip?Bu Tan aims to slim Intel’s headcount to 75,000, down from 109,000, through layoffs, attrition, and other measures. He’s also pausing factory expansions in Germany and Poland, slowing an Ohio plant build, and shifting production from Costa Rica to Vietnam and Malaysia.
Wall Street stayed cautious. Bernstein’s Stacy Rasgon doubts PC business tailwinds can offset structural challenges, while Bank of America analysts point to an 18A process ramp and an upcoming PC refresh as potential catalystseven as they maintain a Neutral view.
Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD) and TSMC (NYSE:TSM) are major players in the AI chips and foundry services market, offering intense competition to Intel. Tan promises no more blank checks, all investments must pay their own way. Now that the chip giant struggles to get back on its feet, investors will keenly monitor the evidence that such extreme measures will bring it back to growth and profitability.
This article first appeared on GuruFocus.
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