Intel Corporation (NASDAQ: INTC) has been facing the brunt of the market’s wrath in recent days after its price has been falling lower with each dip. This negative sentiment that surrounds INTC stock continues to drive ahead by several financial and fundamental indicators that place the company’s wider sustainability under question.
The Intel Earnings Miss
The mass selloff most likely was triggered into action following the recent earnings release by the company which showed that it had missed its topline guidance, by as much as half a billion dollars. The real shocker to this came from the guidance being at an already dismal low, considering the weak macro climate, yet Intel still saw underperformance and brought in a year-on-year revenue decline of 27%. Shareholders had really been pinning their hopes on the Client Computing Group segment, which saw a drastic performance, falling by 36%, relative to the prior year’s comparable quarter. EPS was likely to be at an already low $0.20 but only amounted up to$0.10 during the quarter.
INTC Bounce Back Not Certain
Many analysts point to deeper and more fundamental problems associated with INTC stock than a merely bad quarter. Weakening financials make recovery seem all the more unlikely and compromise the chipmaker’s financial position. Management had previously stated its commitment to cut down costs and shrink its cash burn to remain financially viable into the future. However, Intel’s losses it incurred in its recent quarter show that this goal is hard to get to. The company now faces a serious choice of whether to drastically cut down its capital expenditure, or scale down its operations in the market.
Intel Corporation is going through a rough phase, but this seems to be more than just a temporary dip. The highly competitive nature of the chip-making and semiconductor sectors means the next biggest competitor is waiting in line to grab INTC’s lost market share.