Intel shares fell more than 20% after its fourth-quarter revenue forecast missed estimates, hit by weak PC processor demand and data center supply problems.
Kunjan Sobhani says Intel's gross margin dropped almost 600 basis points quarter over quarter, as costly new nodes and data center products squeeze profitability while peers beat by billions.
Amazon shares fell about 6.7% after hours despite AWS beating estimates with 39% growth, as Anurag Rana says investors wanted a bigger beat, though he calls the 40% forecasts very strong.
Intel Shares Plunge More Than 20% as PC Demand Sputters
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Kunjan Sobhani, Senior semiconductor analyst at Bloomberg Intelligence. Sobhani called Intel's fourth-quarter guidance miss surprisingly large given an already weak PC market, and said gross margin fell almost 600 basis points from the mid-40s as lower-margin data center products and costly new nodes hurt the mix. He backs the data center focus and calls foundry the North Star, but says peers beating by billions make patience hard. He wants answers on a margin floor and material packaging revenue, and expects AMD to hold up better thanks to share gains.
Anurag Rana, Senior technology analyst at Bloomberg Intelligence. Rana said Amazon fell because AWS only met 39% growth expectations while Google and Microsoft beat, though he calls the 40% forecasts very strong. He cites AWS operating margins near 39% and a run rate of about $180bn, and sees the cash-flow dip as temporary given the backlog and market share gains. He warns that higher interest rates and political opposition to data centers could stall projects, leaving cash flow negative and growth unrealised next year.
News
Intel shares plunge more than 20% on forecast. Intel's revenue forecast missed estimates as PC processor demand sputtered and data center components ran into supply problems. The stock had gained 150% before the report and was still down about 18.5% in the session.
Amazon slips after hours despite AWS beat. Shares fell about 6.7% even as AWS net sales grew 39% excluding currency. Fourth-quarter sales guidance of $240bn to $247bn sat in line with estimates near $244.5bn.
Amazon free cash flow swings to big outflow. Trailing twelve-month free cash flow fell to an outflow of $42.4bn as Amazon plans capital expenditure of about $220bn for the year.
Amazon sees AWS growth above 40% through 2028. Amazon expects AWS sales growth above 40% in both 2027 and 2028, a target analysts on the show called strong for a business of its size.
Microsoft flags third-party data center delay. Microsoft said the day before that one of its third-party partners had delayed data centers, an early sign of risk to the AI buildout as rates rise.
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