Intel shares closed down 6.4 percent on Friday after the company announced its quarterly and full-year financial results. As you can imagine, the reason for this sharp decline in the shares is the bad numbers. The processor giant’s annual revenue fell by 32 percent compared to the previous period and the loss of $664 million in the fourth quarter of 2022 surprised both analysts and investors.
There has been a great war going on in the processor world lately. While AMD was pushing Intel hard by attacking with the Ryzen series from the supply of the long stagnation period, Apple’s stopping using Intel processors in its computers and making a show with its own processors seriously affected Intel’s sales.
Intel shares tumble after figures were released
Although Intel’s finance unit attributes the said decline to decreased demands due to economic uncertainties, it is clear that the main problem is to lag behind competitors when the subject is examined in depth.
Data center server chips, Intel’s highest-margin product, lagged behind its main competitor, AMD. Industry analysts point to a huge price-performance gap between Intel’s Sapphire Rapids server processor and AMD’s server chip Genoa.
This means that AMD will gain share in the server segment over the next few quarters.
The difference between the processors is already reflected in the numbers. Intel’s data center segment revenue fell 33 percent year-over-year in the fourth quarter, while operating profit fell 84 percent.
Cowen analyst Matthew Ramsay says 2023 and 2024 will be tough for Intel. Barron’s previously warned investors that Intel’s situation would worsen, citing server processors, product delays, and growing competitive threats from AMD and Apple.
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