Intel The company’s weak revenue and profit forecasts on Friday recorded a decline of more than 8%, provoking the new CEO Lip-Bo Tan’s strategy to revive the sticking chipmaker.
Years of bad decisions have overtaken the struggling American chipmaking icon in the attractive artificial intelligence industry, while a fierce China-US trade war doubts the demand for a close period for its PC processor.
On Thursday, Tan gave a glimpse of his plans to re -introduce Intel’s innovation culture to remove unnecessary administrative functions and to cut the workforce by focusing on core engineering.
“Intel is so big that transferring your course is like changing a warship – it cannot be done on a dime,” said Evercor ISI analysts.
JP Morgan analysts said that Tan did not expand much about how he would restore Intel’s leadership status in construction, nor on his plans to attract more external customers in the company’s foundry, said JP Morgan analysts.
Tan focuses on contract construction business and has recently met the CEO of rival TSMC how the two companies can cooperate.
Officials said the first quarter sales were increased by customers by stockpiling chips of chips as the increasing tariff tension between the US and China has cautioned buyers from future purchases.
Intel may also stand for profit if China introduced some exemption on American imports in view of the large presence of the company in the Asian country, said the global technology analyst at Ben Barringer, Quilter Shawiet.
AI strategy in question
Tan’s comments about intensifying Intel’s existing products have raised questions to suit AI’s best to suit how the company has a plan to move forward in Artificial Intelligence sector and challenge market leaders NVDia.
“Intel needs to be fasted faster – they have a lot of investment to catch in AI,” said Stifel analyst Ruben Roy.
Historically, Intel has trusted buying startups to carry forward his AI ambitions. In addition to mobiles, which Intel came out a few years ago, other deals did not help the company receive too much traction.
“Intel should always have her own internal solution, but it missed the boat and tried to achieve her way in AI,” said Ansel SAG, lead analyst of Moore Insights and Strategy.
One of Intel’s biggest misconception failed to capitalize on rapid demand for AI chips, allowing Nvidia to dominate the market.
Intel now faces a difficult fight to challenge the AI Heavyweight as it lacks the same level of the GPU intellectual property which is essential for AI workload, said Barringer.
So far this year, the company’s stock has increased by 7.2%, which is performing better than NVIDIA and advanced micro devices, which has fallen by about 20% in each.
Intel, however, trades 31.37 vs. 22.70 for NVIDIA and 12-month forward price-to-kamai ratio of 19.24 for AMD.
