Intel's performance "thunderbolt", the market value has historically evaporated 54 billion
Intel released its 2022 Q4 and full-year financial reports yesterday (27). Q4 revenue plummeted by 1/3, setting a new low quarterly revenue since 2017. Intel's stock price closed down 6.41% today, and its market value evaporated by about US$8 billion.
"Intel's fourth quarter is very difficult." Intel CEO PatGelsinger said bluntly. After the U.S. stock market closed yesterday, Intel released its 2022 Q4 and full-year financial reports, showing that fourth-quarter revenue was US$14 billion, a year-on-year decrease of 32%, and a net loss of nearly US$700 million, compared with a net profit of US$4.6 billion in the same period last year. Intel's full-year revenue in 2022 will be US$63.1 billion, and its net profit will be US$8 billion, which is directly halved compared with the US$19.9 billion in 2021.
Intel shares plunged nearly 10% in after-hours trading after the earnings report was released. Today, Intel’s stock price closed down 6.41% at $28.16 per share. On the same day, Intel supplier KLA closed down 6.9%. "No words can describe or explain this historic collapse of Intel..." said Rosenblatt Securities analyst Hans Mosesmann, one of 21 analysts who lowered their price target on Intel shares.
The decline continues, and Intel expects that Q1 will continue to suffer losses. According to Reuters news, Intel said that the company is struggling to deal with the slowdown in data center business growth. Its Q1 revenue forecast for this year is only between 10.5 billion and 11.5 billion U.S. dollars, which is 3 billion U.S. dollars lower than analysts’ average expectations. It is equivalent to returning to the level of 2010. Intel said revenue and margins in its data center and AI (DCAI) business contracted due to weak server demand and competitive pressure from AMD.
Intel has tried to rebuild its market dominance by expanding its foundry business and building chip factories in the U.S. and Europe, but the gloomy outlook is putting pressure on Gelsinger. Intel has also received a lot of doubts, the manufacturing process is not refined, and the advanced process is lagging behind, far behind Samsung, TSMC, etc.
On the other hand, rivals such as AMD are aggressive and have been eating away at Intel's market share. Relying on manufacturing technologies such as TSMC, AMD has caught up with Intel's foundry chipmakers to produce chips. AMD's Genoa and Bergamo data center chips have a greater price/performance advantage compared to 4th Generation Intel®️ Xeon®️ Scalable processors, which should further drive AMD's market share, said Matt Wegner, analyst at YipitData, a market research firm. rise.
As for the data center market, the industry has given a more pessimistic outlook. Intel once occupied the absolute leading position in the data center market, but now it is also attacked by competitors such as AMD and ARM. Analysts said that even though it was previously expected to bottom out in the second half of 2022, Intel will still be in a disadvantageous position for now, and Intel may lose more market share.
Under internal and external difficulties, Intel's frugality spanned from last year to this year. Since last year, Intel has promoted measures such as layoffs and business cuts in many places. This year, Intel plans to cut costs by US$3 billion throughout the year. It is estimated that capital expenditures in 2023 will be about US$20 billion. Some analysts said that the company should consider cutting dividends.
