Intel Shares Fall as Dour Forecasts Overshadow CEO’s Turnaround Promises

The Intel logo is seen near computer motherboard in this illustration taken January 8, 2024. (Reuters)
The Intel logo is seen near computer motherboard in this illustration taken January 8, 2024. (Reuters)
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Intel Shares Fall as Dour Forecasts Overshadow CEO’s Turnaround Promises

The Intel logo is seen near computer motherboard in this illustration taken January 8, 2024. (Reuters)
The Intel logo is seen near computer motherboard in this illustration taken January 8, 2024. (Reuters)

Intel's shares fell more than 8% on Friday as the company's weak revenue and profit forecasts overshadowed new CEO Lip-Bu Tan's strategy to revitalize the embattled chipmaker.

Years of bad decisions have left the struggling American chipmaking icon trailing in the lucrative artificial intelligence industry, while a raging Sino-US trade war casts doubt on near-term demand for its PC processors.

Tan on Thursday gave glimpses of his plans to reanimate Intel's culture of innovation by focusing on core engineering, stripping away unnecessary administrative work and cutting workforce.

"Intel is so huge that shifting its course is like turning a battleship – it cannot be done on a dime," Evercore ISI analysts said.

Tan did not provide much detail on how he will restore Intel's leadership position in manufacturing, nor on his plans to attract more external customers to the company's foundry, J.P.Morgan analysts said.

Tan remains focused on the contract manufacturing business and has recently met rival TSMC'S CEO to discuss how the two companies could collaborate.

Executives said first-quarter sales were boosted by customers stockpiling chips as growing tariff tensions between the US and China have made buyers wary of future purchases.

Intel could also stand to benefit if China introduces certain exemptions on US imports given the company's large presence in the Asian country, Ben Barringer, global technology analyst at Quilter Cheviot, said.

AI STRATEGY IN QUESTION

Tan's comments about sharpening Intel's existing products to best suit emerging AI trends have sparked questions on how the company plans to get ahead in the booming artificial intelligence sector and challenge market leader Nvidia.

"Intel needs to streamline fast – they have a lot of investments to make to catch up in AI," Stifel analyst Ruben Roy said.

Historically, Intel has relied on buying startups to further its AI ambitions. Other than Mobileye which Intel spun out a few years ago, the other deals didn't help the company gain much traction.

"Intel should have always had its own internal solution, but it missed the boat and tried to acquire its way into AI," Anshel Sag, principal analyst at Moor Insights & Strategy, said.

One of Intel's biggest missteps was failing to capitalize on the booming demand for AI chips, allowing Nvidia to dominate the market.

Intel now faces an uphill battle in challenging AI heavyweights as it lacks the same level of GPU intellectual property, which is essential for AI workloads, Barringer added.

The company's stock has gained 7.2% so far this year, outperforming Nvidia and Advanced Micro Devices, which have fallen nearly 20% each.

Intel, however, trades at a higher 12-month forward price-to-earnings ratio of 31.37 versus 22.70 for Nvidia and 19.24 for AMD.



Huawei Launches 1st Laptops Using Home-grown Harmony Operating System

Huawei Atlas 800 inference server is displayed at InnoEX Fair, in Hong Kong, China April 15, 2025. REUTERS/Tyrone Siu/File Photo
Huawei Atlas 800 inference server is displayed at InnoEX Fair, in Hong Kong, China April 15, 2025. REUTERS/Tyrone Siu/File Photo
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Huawei Launches 1st Laptops Using Home-grown Harmony Operating System

Huawei Atlas 800 inference server is displayed at InnoEX Fair, in Hong Kong, China April 15, 2025. REUTERS/Tyrone Siu/File Photo
Huawei Atlas 800 inference server is displayed at InnoEX Fair, in Hong Kong, China April 15, 2025. REUTERS/Tyrone Siu/File Photo

Huawei launched two new laptop models on Monday, the first sold with its own Harmony operating system, in a bid to take on well-established Western Big Tech rivals even as the United States seeks to limit its access to crucial chips.

Despite its emergence as the world's leading producer of tech hardware, China's development of computer operating systems has lagged behind Microsoft (MSFT.O), and Apple (AAPL.O), whose Windows and macOS have cornered the global market for decades.

The new MateBook Fold and MateBook Pro both run on HarmonyOS 5, the latest version of an operating system Huawei Technologies began developing in 2015 and introduced five years later on its Mate series smartphones, Reuters reported.

It began developing the laptop prototypes in 2021.

"The Harmony laptop gives the world a new choice," Yu Chengdong, head of Huawei's consumer business group, said during a livestreamed launch event. "We kept on doing the hard things but the right things."

The base model of the MateBook Fold, which does not have a physical keyboard and offers an 18-inch OLED double screen when fully extended, will sell for 23,999 yuan ($3,328).

The MateBook Pro model, which uses a conventional laptop keyboard, is priced from 7,999 yuan.

Washington began restricting Huawei's access to U.S. technology in 2019 over national security concerns, pushing the company to build its own capacity to develop and produce chips and operating systems.

Huawei said the HarmonyOS for computers currently offers over 150 applications, including WPS Office from Kingsoft (3888.HK), - an alternative to Microsoft's Office - and photo editing app Meitu (1357.HK), Xiu Xiu.

By the end of 2024, over 7.2 million individual developers were developing apps for HarmonyOS, which was installed on over a billion devices, including smartphones and TVs, according to Huawei's latest annual report.

Huawei did not disclose which processing chip it had used to power the newly-launched laptops. But it said the computers' relatively high prices were the result of the cost of new manufacturing technology for the chipset.