this post was submitted on 02 Aug 2024

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Intel's stock drops 30% overnight —company sheds $39 billion in market cap | As of now, Intel's market value is a fraction of Nvidia's worth and less than half of AMD's (www.tomshardware.com)

submitted 3 months ago by [email protected] to c/[email protected]

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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.

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[–] [email protected] 22 points 3 months ago (2 children)

Nice to just imagine that this was backlash to the inhumanity of the constant layoffs. It's not, but would be nice.

[–] [email protected] 13 points 3 months ago

Burst layoffs to polish up earnings reports are "fine" (in terms of stocks), but hemorrhaging workers when your company is already in hot water for product quality complaints smells of "We're really desperate to make our reports not look devastating". From a stupid monkey brain point of view, it sounds like they're throwing sailors overboard to avoid sinking and I wouldn't want to be a passenger and risk being next, so I'd try to sell what shares I have before they're worthless.

I don't know what heuristics professional traders go with, but I imagine they would follow a more complex and nuanced logic along those same lines. Either way, if enough people do that, it compounds.

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[–] [email protected] 21 points 3 months ago (1 children)

Ugh, I got a fair return from buying to AMD right before Ryzen came out. I sold some of it and bought multiple different chip companies so now I have some AMD, some Intel, some NVDA. Oh well, it's not a huge amount but still sucks. I hope they can come back if only because AMD needs competition to keep them from becoming the evil that old Intel was. I was hoping Intel would also be a viable third GPU competitor, I like my Arc A770 for the price and I'm hoping they don't kill off the GPU division.

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[–] [email protected] 19 points 3 months ago* (last edited 3 months ago) (2 children)

Ugh, I hope Loongson becomes competitive soon. If AMD gets a monopoly, cpu technology is going to get stagnant. And not decrease in cost.

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[–] [email protected] 19 points 3 months ago* (last edited 3 months ago) (6 children)

There is absolutely no way intel is going under any time soon. They may drop more but it's almost certain that they will recover.

I don't understand a valuation that puts them under AMD given how poor amd's market share is in the gpu market (which intel is now a new valid competitor in for the budget space) alongside the fact that intel's cpu market share is higher than AMD by a large margin.

I'm saying all this as a huge AMD fan. I have a 5800x3d and a 6800xt. I made our work standard laptop be amd based as I set the standards for my organization in my work role. I know my choice is the minority choice. Even in datacenter intel has an overwhelming lead.

[–] [email protected] 21 points 3 months ago (1 children)

It's because the stock market is closer to a casino than a place where fair valuations of businesses are made.

Also, market cap is just the latest trade price times the total number of shares. It doesn't mean that anyone is willing to buy or sell the entire business for that amount, just that some shares were traded at a price that extrapolates to that.

It's kinda like getting an A on your first assignment in grade 1 and assuming that means you're a straight A student and will maintain that until you finish your doctorate. Or getting an F and assuming you might as well just drop out.

The closest thing to reality market cap really says is that investors who are making current trades believe that AMD will surpass Intel at some point. Or that they aren't comparing either company directly to the other and just go by feeling plus the price history. "I feel more confident in AMD today, therefore the price should be higher than it was yesterday. I feel less confident in Intel today, therefore the price should be lower than it was yesterday." It doesn't even really matter if yesterday's price was accurate, it's all just relative to itself and fed by fear and greed.

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[–] [email protected] 18 points 3 months ago (3 children)

Those fuckers better not stop making graphics cards because of this...

[–] [email protected] 16 points 3 months ago (2 children)

Unless the person running that project is owed a personal favor I don't think there's a chance in hell it's going to survive. I'm pretty sure they're running the video card side of the business at a substantial loss trying to catch up with market share and tech.

[–] [email protected] 17 points 3 months ago (1 children)

I know you're right but it's so short sighted and we waited so long to have a graphs card triopoly...

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[–] [email protected] 16 points 3 months ago (1 children)

Time to buy?

I'm pretty sure the US gov views them as too big to fail. Surely they can't mess up Xe, Falcon Shores, and the foundry business, right?

RIGHT!?

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[–] [email protected] 14 points 3 months ago

They definitely deserve this. Still, I hope their fab business works out because we need another high end fab (especially a US based one). It's exorbitantly expensive, too much for anyone but an established player to enter the market.

[–] [email protected] 14 points 3 months ago (1 children)

Intel should merge with Boeing

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