🧪 Intel Nukes

Good Morning!

First up, Meta’s soaring revenue beats forecasts with a staggering 73% earnings jump. But don't let that overshadow the brewing storm: the S&P 500 just had its worst July in a decade, and history might be about to repeat itself.

Today's spotlight? Intel. The tech titan is reeling from its worst loss since 2000, slashing 15,000 jobs, and suspending dividends. As Intel battles AMD and Nvidia, and banks on AI and PC market recovery, the stakes have never been higher.

Let’s get into it 👇

🌡 Market Temperature Check

📈 Meta Stock Jumps as Revenue Beats Forecast, Earnings Pop 73% to $13.5 Billion

🤔 Payrolls, slumping stocks, Apple, Amazon - what's moving markets

📉 The S&P 500 Just Had Its Worst July in 10 Years. History Says the Stock Market Will Do This Next.

📰 What’s Happening Today?

Intel Heads For Worst Loss Since 2000 😲

A Hard-Hitting Cost-Cutting Plan

Intel's latest financial report has been a shockwave in the tech industry. The chip giant's recent second quarter earnings report revealed a miss on both the top and bottom lines, prompting a $10 billion cost cutting plan. This includes slashing 15% of its workforce—approximately 15,000 jobs—and suspending dividend payments.

• Earnings Miss: Intel's Q2 results fell short of Wall St. expectations, prompting the severe cost-cutting measures.

• Massive Layoffs: 15% workforce reduction is about 15,000 jobs, most of which will be cut this year.

• Dividend Suspension: Intel suspends its dividend, previously at a 1.72% yield, with a commitment to restore it once (if) cash flows improve.

Intel’s Struggle

Intel's in the middle of a massive turnaround as it attempts to regain market share from rivals like AMD while investing heavily in AI chip and third-party foundry businesses. However, these efforts come at a time when the PC market is just starting to recover after eight consecutive quarters of decline.

• Market Competition: AMD and Nvidia are outperforming Intel, with Nvidia shares up 127% year-to-date, compared to Intel's 38% decline.

• AI Focus: Intel is heavily investing in AI chips, trying to capitalize on the booming AI market.

• PC Market Recovery: The PC market's slow recovery adds another layer of complexity to Intel's challenges.

The Fallout and The Future

The fallout from Intel's announcement was immediate and severe, with shares plummeting more than 20% in pre-market trading. The weak forecast, coupled with production issues around its Meteor Lake processors, paints a grim picture. Despite a promise of $8.5 billion in funding from Washington, Intel faces an uphill battle to reestablish itself as a leader in the semiconductor industry.

• Stock Plunge: Intel’s stock saw its worst drop since 2000.

• Production Issues: Problems with Meteor Lake processors, crucial for Intel's future, increase the situation.

• Government Support: $8.5 billion in funding highlights the importance of Intel's success to national interests, but also highlights their pressure to deliver results.

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✍ TL;DR

• Earnings Miss: Intel's Q2 results fell short of Wall Street expectations.

• Massive Layoffs: 15% workforce reduction, equating to approximately 15,000 jobs.

• Dividend Suspension: Intel halts dividend payments, with a commitment to restore them once cash flows improve.

• Market Struggle: Intel is losing market share to AMD and Nvidia, with Nvidia's shares up 127% year-to-date compared to Intel's 38% decline.

• AI Investment: Heavy investment in AI chips amidst a booming AI market.

• PC Market: Slow recovery in the PC market adds complexity to Intel's challenges.

• Stock Plunge: Shares dropped over 20% in pre-market trading, marking the worst drop since 2000.

• Production Issues: Problems with Meteor Lake processors crucial for Intel's future.

Stay ahead, stay informed, and most importantly, stay profitable.

‘til next time,

TradingLab