- cross-posted to:
- pracownicze@szmer.info
- cross-posted to:
- pracownicze@szmer.info
Intel’s stock dropped around 30% overnight, shaving some $39 billion from the company’s market capitalization since rumors of a pending layoff first emerged. The devastating results come after the chip giant reported a loss for the second quarter, complained about yield issues with the Meteor Lake CPU, provided a modest business outlook for the next few quarters, and announced plans to lay off 15,000 people worldwide.
When the NYSE closed on July 31, Intel’s market capitalization was $130.86 billion. Then, a report about Intel’s massive layoffs was published, and the company’s market capitalization dropped sharply to $123.96 billion on August 1. Following Intel’s financial report yesterday, the company’s capitalization dropped to $91.86 billion. Essentially, Intel has lost half of its capitalization since January. As of now, Intel’s market value is a fraction of Nvidia’s worth and less than half of AMD’s.
As Intel’s actions look rather desperate, analysts believe that Intel’s challenges are existential. “Intel’s issues are now approaching the existential,” Stacy Rasgon, an analyst with Bernstein, told Reuters.
My guess is Intel’s management is full of inflexible dead weight that doesn’t want to adapt to the new reality that PCs are only going to become less and less relevant as a computing model. Like other companies that had established cash-cow businesses like Sears with its mail-order catalog, Kodak with film, Motorola with analog mobile phones, etc., current management doesn’t want to jeopardize their positions by allowing a new business to dominate, and so the company is doomed to a slow death.