Intel (NASDAQ:INTC) shook up investor confidence when it lowered its outlook for the current quarter. Not only did the data center revenue fall for the first time but the company now sees downside ahead.
Intel reported non-GAAP earnings of $0.89 as revenue was flat year-over-year at $16.1 billion. The company forecast revenue of $15.6 billion and 2Q GAAP EPS of $0.83. On its conference call, Intel said its 10nm technology for desktop will be delayed for an unacceptable two years.
10nm is too out of date to be competitive. Instead, Intel needs to aim for the 7nm process to catch up to Taiwan Semiconductor (NYSE:TSM) and Advanced Micro Devices (NASDAQ:AMD). On a positive note, Intel demonstrated a 5G N3000 FPGA acceleration card for 5G base stations.
Intel is clearly losing market share to AMD, whose data center powered by EPYC is superior. The chip giant will clearly lose more market share over time. Memory price declines worsened and data center inventory and capacity digestion is worse than thought. Business in China is also poor.
Your Takeaway
INTC stock typically falls sharply after poor results and then edges higher. Watch Intel and AMD for now but do not average down just yet.
