On Thursday, Intel revealed a Q2 mixed report due to the artificial intelligence (AI) boom, benefiting its rivals, Nvidia and AMD.
The chipmaker stock closed the session, declining by -5.50% to $29.05 apiece and continued to dip by -20.52% to $23.09 per stock in the after-hours.
Moreover, Intel’s earnings per share (EPS) slid to $0.02, lower than the analysts’ $0.10 estimate and its previous $0.18 data.
The firm’s revenue was $12.83 billion, missing the $12.93 billion consensus but higher than the previous $12.72 billion report.
Meanwhile, the stock decline comes with the US chip plunge following a conservative outlook from Arm Holdings on Wednesday.
Furthermore, dominant chipmaker Nvidia and smaller competitor AMD recovered in the after-hours session. This highlights their well-positioned position to take advantage of the AI frenzy, while Intel has faced a disadvantage.
As a result, the US-based chip manufacturer is executing a turnaround plan centered on developing advanced AI processors and expanding its for-hire manufacturing capabilities. This strategy aims to regain the technological edge it lost to TSMC.
Intel’s effort to revitalize the contracting foundry business under CEO Pat Gelsinger has also raised its expenses and strained profit margins. Recently, the firm announced plans to reduce costs.
Nvidia, AMD Market Dominance Pushes Intel to Cut Employment
Intel has revealed plans to cut its workforce as it tries to keep up with chipmaker rivals Nvidia and AMD.
On Thursday, the California-based firm announced it will reduce about 15,000 employees to slash costs by $10.00 billion next year.
According to reports, the move comes after Intel revealed a $1.60 billion loss last quarter, compared with revenue of $1.50 billion in 2023.
Meanwhile, the chipmaker revealed in June that it ceased its expansion plans in Israel. The firm also reasoned that its decisions regarding large-scale projects consider business conditions, market dynamics, and prudent capital management.
Still, Intel’s AI personal computer processors are ironically performing better than anticipated.
