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Latest: Intel stock slumps 8% after poor earnings show softening demand for PCs

Shares of Intel were down 8% on the day. Following poor second-quarter earnings that underperformed on both the top and bottom lines, Qualcomm’s stock fell on Friday.
According to Refinitiv statistics, Intel’s revenue fell by 22% year-over-year and below expectations by 14%. This is the company’s greatest top-line disappointment since 1999.

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After reporting disappointing second-quarter profits, Intel’s shares fell 8% on Friday, following the company’s announcement that it had missed on both the top and bottom lines.

According to Refinitiv statistics, Intel’s revenue fell by 22% year-over-year and below expectations by 14%. This is the company’s greatest top-line disappointment since 1999. It had a financial loss of $454 million for the quarter, compared to a net profit of $5 billion for the same period last year.

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In addition, the corporation has decreased its full-year outlook. Compared to three months ago, Intel now expects full-year adjusted earnings of $2.30 per share and revenue of $65 billion to $68 billion.

According to Intel’s finance director David Zinsner in an interview with CNBC, the updated prediction takes into account economic instability that could lead to enterprises delaying PC refresh cycles. According to him, computer purchases by small and medium-sized firms have slowed, but the overall market has held.

Zinsner stated, “We do think we’re at the bottom.”

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As much as we’d like to assume this was a one-time reset, we’re seeing ongoing issues with Intel’s business model, analysts at Susquehanna have observed.

According to the experts, Intel has used Moore’s Law and process leadership for decades to hide a long list of failed initiatives, acquisitions, and strategic missteps. If Intel does not reclaim this leadership (which we believe is highly improbable), or if they shift their strategic approach, we expect Intel’s growth, profitability, and cash flow concerns to endure.

Analysts at Baird cut Intel’s rating as well, citing supply chain delays and changes in customer behavior as reasons for their decision.

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Due to “structural changes in PC consumer consumption patterns, coupled with a seasonally weak first half that would continue to weigh Intel’s utilization rates and gross margin recovery,” they wrote in their Friday research.

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