Intel Corporation’s shares plummeted over 8% on Friday, driven by the company’s poor revenue and profit forecasts under new CEO Lip-Bu Tan. The struggles of the US-based chipmaker have left it trailing in the lucrative AI industry, which has seen Nvidia dominate the market.
Tan aims to revitalize Intel through a focus on core engineering, reducing administrative work, and cutting workforce. However, details about his plans to regain leadership position in manufacturing and attract external customers are scarce. The new CEO remains focused on contract manufacturing and is exploring collaboration with rival TSMC.
First-quarter sales were boosted by customers stockpiling chips due to growing US-China tariff tensions. Intel may benefit if China introduces certain exemptions on US imports, given its significant presence in the Asian country. Tan’s comments on sharpening existing products for emerging AI trends have sparked questions about how the company plans to catch up with Nvidia.
Historically, Intel relied on buying startups to further its AI ambitions, but missed opportunities to capitalize on booming demand for AI chips. Now, the company faces a tough battle in challenging AI heavyweights due to its lack of GPU intellectual property essential for AI workloads. Despite this, Intel’s stock has gained 7.2% year-to-date, outperforming Nvidia and AMD.
Source: https://finance.yahoo.com/news/intel-shares-sag-downbeat-forecasts-063007994.html