“We stumbled…we lost share…we lost momentum,” CEO Pat Gelsinger told investors in a conference call Thursday night. “We think that stabilizes this, we are (and) are going to build a roadmap that allows us to regain long-term leadership in this critical market.”
“We are confident in the strategic perspective we have for our business, even though the macro is difficult,” he added. “It was tough in the fourth quarter. We expect it to continue to be tough as we move into the first half of the year, but we’re focused on controlling the things we can and every aspect of our execution, cost management and transformation is in our hands and we’re well along in executing against those paths.”
Intel shares were down 10.55% in early trading on Friday to change hands at $26.92 apiece. Chip rivals were also under pressure, with Advanced Micro Devices (AMD ) – Get a free report shares were down 1.3% at $74.15 apiece, while Nvidia (NVDA ) – Get a free report it fell 0.7% to $196.65 each.
“While no full-year guidance was provided, Intel sees the first-half correction to be followed by a second-half recovery,” said John Vinh, an analyst at KeyBanc Capital Markets, who lowered his earnings estimates to short term but maintained its ‘sector weight’. Intel stock rating.
“We expect 2023 to be another challenging year with limited catalysts,” he added.
Intel’s delayed next-generation ‘Sapphire Rapids’ chip is expected to ramp up production later this year, but will likely still find it hard to challenge Advanced Micro Devices. (AMD ) – Get a free report new ‘Genoa’ data center chip which CEO Lisa Su says will result in “lower capex, lower opex and lower total cost of ownership” for enterprises and cloud data centers.
“Intel had high hopes that Sapphire Rapids would allow them to fight AMD and regain some footing within data centers,” said Lucas Keh, a Third Bridge semiconductor analyst.
“However, our experts say it has been disappointing so far due to continued inconsistency in delivery from Intel,” he added. “They had to remove features to finally deliver Sapphire Rapids in a reasonable amount of time to the public amid the delays.”
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