Yes, this is just posting a link. But everything everyone has said here in the past year is now being seen by the big boys. It only gets uglier from here.
http://blogs.barrons.com/techtraderdaily/2017/02/28/intel-sell-says-bernstein-server-is-cracking-fabs-aint-what-they-once-were/?mod=yahoobarrons&ru=yahoo&yptr=yahoo
It always amazes me when wall street analysts think tech company is a growth company when in invests a heck of a lot of money into industries that it has no track record of playing in, has no profit, and taking lots of losses for many years...And still think this is a growth strategy that will win...
Many tech companies have proven time and time again that when the go down this path, they often end up leaving the door wide open to competitors for their previous bread and butter "non growth" business that actually pays for all the bills, including all the investments they are making into those non profitable businesses. And when competitors start attacking those bread and butter non growth-but making money businesses, pretty soon the company ends up in deep shet... Just ask Broadcom that threw away their connectivity business after they poured such money into a never ending money losing LTE modem business instead of investing money in connectivity to stay the market leader.
The CNBC roundtable was interesting today, most of them defending INTC as investing lots of money into new businesses away from the PC. 'This is a growth stock and we will continue to hold it'.
The Street looks like it is gathering support at ~ $35.75, at least for the majority of the day. It's going to take a bit for somebody to figure out how to unwind all those April 21 high-30s calls with minimal damage.
This really isn't the fault of Intel or Qualcomm or any other tech company BTW, it's just how this industry works. Short of any new innovation or breakthrough, companies survive by trying to eat into each other's business by offering to do things faster better cheaper.
There's games companies can try to play by using IP royalty licensing, vendor locking with proprietary libraries , hardware etc...But eventually, it all catches up...Just like what is happening right now with all the Qualcomm lawsuits attacking their licensing model. Other companies are attacking it simply because they want part of the game...But if they were in qualcomm's envious licensing shoes , they would be doing the exact same thing.
Intel does have execution problems.
But even if they had better execution, I am not convinced the margins and profitability are there in the industries they are trying to penetrate anyway.
(isn't the high tech industry fun???)
Lol
Well to be fair, if qualcomm is successful in penetrating into the PC markets with its snapdragon line, their upside would also be short lived. Once Qualcomm has sucessfully trailblazed an ARM based app processor in a consumer PC, it would only be a matter of time before some other lower cost company like Samsung does the same thing with an almost as good Exonos ARM app processor that costs less than Snapdragon. And once Samsung Galaxy has done that, it's just a matter of time before an even cheaper MediaTek from Taiwan does the same thing. And once Mediatek has successfully done thst, it's just a matter of time before an even cheaper Huawei or ZTE from China does it too.
So as you can see, we work in an industry in which the ultimate goal is to race to the bottom and put as many competitors out of business along the way by make the business have ultra Shetty margins such that almost no one else can make money doing it....
Lol.
@lwy - Good observation.
Intel IoT products are just re-purposed CCG CPUs with a few tweaks. It's simply a re-branding of 30+ years of Embedded Products. There's fundamentally no new development going on there, and the IoT group is expected to keep up the traditional margins. That's why sub-Atom CPUs never really see the light of day in any volume - no way can they support a $10 CPU. QCOM has nothing but upside, INTC, nothing but downside.
To Intel, defense that's why they are trying to branch out in mobile, IOT, automotive, AI. Intel knows the PC/server market is no longer growing.
The problem is that where they are trying to branch into is typically a much lower margin business where Intel isn't accustomed to playing. Automotive has much fatter margins, but once an OEM selects a supplier, they rarely change to a new supplier, so Intel is going to have a very tough time trying to unseat the incumbents already there.
Qualcomm is doing the opposite. They are are trying to push into the personal computing space by putting arm based snapdragon 835 into laptops etc. While the margins on that will be lower than traditional PC processors, it will still be fatter margins that it's use to see in mobile.
So on one hand you have Qualcomm trying to eat into Intel's computing business and you have Intel trying to eat into qualcomm's mobile/IOT business.
The question will be if Intel's market share loss in PC with traditionally higher margins can be made up with a heck of a lot more volume in the much lower margin IOT/mobile space.
The only thing I think AMD made screwed up on was spending time to release the Ryzen 1700.
I don't think this particular processor is going to sell well. It will end up costly slightly more than a discounted 7700k from intel, and perform less than it as a gaming CPU. And at the same time doesn't perform nearly as well in the multi-core segment either, and is only $70 less than the 1700x, which performs better.
The 1800x is a performance bargain. It is and will continue to sell like hotcakes.
The 1700x is more of an entry performance bargain. It will sell well, but not nearly as well as the 1800x
Not many are going to buy the 1700 at the current price.
And it looks that's the case on Amazon's best seller.
AMD needs to drop the 1700's price by another $100 to make it compelling.
@jbh - Spot on. There is no upside at all for Intel given its current market share in desktop/mobile and server. And given their flat forecast for 2017 from the Investor's meeting, they were counting on margin improvement in CCG to offset any flat-to-down volumes trends. Besides 14-nm process stability/optimization, that would also imply a stable or slightly higher ASP mix, which, after seeing the leaked Ryzen pricing, seems unlikely. I'm guessing we'll see a lot of short action today, particularly for April and beyond.
AMD Ryzen is going translate into a smaller market share for intel, and eventually, lower selling prices for intel....Since intel currently almost owns most of the desktop market, that only means it's not going to be good for intel's quarterly numbers moving forward as intel has nowhere else to go but down in market share.
On the other hand, AMD Ryzen doesn't have to do that well in order for AMD to gain market share since it's existing market share is so low. A mildly successful Ryzen processor will allow it to have a net market share gain, even if it is small. And given how Ryzen so far appear to be nothing like the Bulldozer fiasco from the past, Ryzen probably will exceed expectations in terms of grabbing some market share.
In addition, next quarter AMD's got Vega coming to challenge Nvidia at the GPU front. I think that's more interesting that the Naples server chips AMD is also trying to release in Q2 to challenge Intel....Switching enterprise customers from Intel to AMD will be a much slower process since enterprise customers usually don't want to switch mid-year.
Truth hurts and if only more truth be known the stock would crash even more
😂😂😂😂😂😂😂😂😂😂😂😂
Very interesting and accurate article. Thanks for sharing. Intel employees disregard these reports just like Intel executives disregard good advice... That's OK; Intel will suffer the consequences.
SUMMARY
Shares of Intel (INTC) are down 45 cents, or 1.2%, at $35.75, after Bernstein’s Stacy Rasgon cut his rating on the shares to Underperform from Market Perform, after concluding the company’s facing a bad “multi-year structural case” where its server chip franchise is “cracking,” it has nothing to replace PCs in similar volume, its vaunted advantage in manufacturing means less and less, and its stock is expensive.
“Datacenter is showing real signs of cracking,” writes Rasgon, “competition is increasing, growth opportunities are declining in quality, and competitor advantages in design/architecture are beginning to blunt whatever process advantages the company has left.”
Beginning of the end for POS company
The burgers are burning. Back to work
Happy to oblige, bruh. After hours down $0.40 and sliding.
Thanks for the usual anti-Intel propaganda Bruh.