Intel reported earnings on Thursday evening, with all key metrics falling short of market expectations. The company reported a net loss of $1.6 billion (CZK 37.5 billion), which represents a year-on-year decrease of 85 percent.
Intel’s shares thus fell by about 20 percent in the pre-trading phase on Friday, and even by 28 percent half an hour after the opening of trading. The sharp fall was also caused by the news of layoffs, which will affect approximately 17,500 employees, which raises concerns about the company’s ability to catch up with the Taiwanese chip giant TSMC, which it has been lagging behind in recent years, the agency said Reuters.
Once the market leader
Intel’s long-term decline continues. The Santa Clara, California-based company was once the market leader in microprocessor manufacturing, the Intel Inside sticker became a prominent marketing feature adorning desktop computers in the 1980s and 1990s.
Intel together with the companies Cisco Systems, Microsoft and Dell ruled the world of information technology at the turn of the millennium, the shares reached their peak in 2000. However, investors’ enthusiasm for technology companies waned and in the same year the dot-com bubble finally burst on the markets. , so not only Intel shares suffered a significant decline.
Nevertheless, Intel still dominated the microprocessor market for some time. However, around 2010 it started to face increasing competition from companies like AMD and later mobile chip makers like Arm. Intel lagged behind them in the development of new chips, so its market share continued to decrease and today it plays “second fiddle” to AMD or Nvidia.
If Friday’s loss of 20 percent or more is sustained during trading, it will mean Intel’s market capitalization will drop to about $100 billion, less than five percent of Nvidia’s market cap and about 40 percent of AMD’s, Reuters added.
A sell-off in tech stocks has begun. Nvidia has lost 25 percent since June
Economic
