Lei Jianping on August 3
Shares of chip giant Intel (INTC), which has just reported its earnings report, have plummeted. Intel closed at $21.48 today, down 26% from the previous day, and the company's market capitalization at $91.8 billion at the closing price.
Intel's stock price was $29.05 the day before, with a market capitalization of $123.662 billion, which means that Intel's market value evaporated $31.8 billion in one trading day.
The plunge also became one of the worst trading days in 40 years.
According to the financial report, Intel's revenue in the second quarter of 2024 was $12.8 billion, down 1% from $12.9 billion in the same period last year; Gross margin was 35.4%, compared to 35.8% in the year-ago quarter.
Intel's data center and artificial intelligence segment revenue for the second quarter of 2024 was $3.05 billion, below expectations of $3.07 billion.
Due to the huge demand for CPUs and GPUs for AI applications, the data center and AI business provides Intel with the opportunity to increase revenue. But Intel's GPUs aren't as popular as Nvidia (NVDA), which is seen as the best overall chip for AI processing.
Intel's client revenue for the second quarter of 2024 was $7.4 billion. Wall Street expects revenue of $7.5 billion. Intel's client revenue was $6.7 billion in the year-ago quarter.
Intel's net loss attributable to the company in the second quarter of 2024 was $1.6 billion, compared with a net profit of $1.5 billion in the same period last year. Adjusted net income was $100 million, down 85% from $500 million in the year-ago quarter.
Intel expects third-quarter 2024 revenue of $12.5 billion to $13.5 billion, well below analysts' expectations of $14.3 billion.
Intel's revenue and profit fell short of expectations, and it announced a cost-cutting plan of more than $10 billion.
Intel expects to lay off more than 15% of its workforce, with most of the layoffs to be completed by the end of 2024. As of June 29, 2024, Intel has 116,500 employees (excluding some subsidiaries), and the layoffs will affect approximately 17,500 people.
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