This Is the Best Reason to Invest in Intel Now. And It Might Be the Only One.

Core Viewpoint - Intel continues to face challenges despite a leadership change, with disappointing financial results leading to an 8.5% drop in stock price [1] Financial Performance - Revenue for the quarter was flat at $12.9 billion, exceeding consensus estimates of $11.9 billion [2] - The Client Computing Group's revenue fell 3% to $7.9 billion, while Data Center and AI revenue increased by only 4% to $3.9 billion [2] - Foundry revenue rose 3% to $4.4 billion, but intersegment eliminations totaled $4.4 billion [2] Cost Management - Intel achieved a workforce reduction of about 15% towards its goal of cutting 20% of its workforce [3] - The company aims to reduce non-GAAP operating expenses to $17 billion for the year [3] - Gross margin fell from 38.7% to 29.7% due to an $800 million non-cash impairment and $200 million in one-time costs [4] Earnings Results - Intel reported an adjusted loss per share of $0.10, down from a profit of $0.02 a year ago, and below expectations of $0.01 per share [5] Strategic Adjustments - The company is focusing on right-sizing its business to meet demand rather than investing ahead of it [7] - Capital expenditures are being reduced to $18 billion for the year, with project abandonments in Germany and Poland [8] - Construction pace at a new foundry in Ohio will be slowed to align spending with demand [8] Future Outlook - Intel expects second-half revenue to be below seasonal levels, projecting $12.6 billion to $13.6 billion for Q3 [9] - The company is committed to its 18A process, which is seen as crucial for future profitability and competitiveness [10] Competitive Landscape - Intel is struggling to grow amidst a booming AI market, while competitors like Nvidia, AMD, and Micron are experiencing strong growth [11][12] - The company needs to demonstrate signs of a turnaround to become an attractive investment [13]