Episode summary
Earnings Special: Intel Plunges on PC Sales Slump & Amazon Slips | Bloomberg Intelligence
Bloomberg Intelligence
· · 10 min · Hosts: Carol Massar, Tim Stenovec, Paul Sweeney · Guests: Kunjan Sobhani, Anurag Rana
Summary
Intel’s after-hours plunge centered on a fourth-quarter revenue guide that missed expectations, with the analyst arguing that weak PC demand and supply constraints on data center parts combined to overwhelm progress elsewhere. He said Intel is still trying to push more supply into data center products, but the PC business remains too weak and the mix is pressuring gross margins, which fell sharply quarter over quarter. He also said investors may need patience on Intel’s foundry turnaround, but competitors are delivering stronger results and better forward guidance.
Amazon also fell after results showed capital spending running hotter than expected and the core business growing more slowly than the market wanted. The analyst said AWS growth of 39% was only in line, not a big beat, even though he still likes the company’s longer-term expectation for AWS sales growth above 40% in 2027 and 2028. He framed the spending as necessary to support backlog and future services, but noted that rising interest rates and a more difficult political climate for data center buildouts could delay projects and keep cash flow under pressure.
Key takeaways
- Intel’s weak guide reflected both sputtering PC processor demand and supply-chain problems in data center components, according to the analyst.
- The analyst said Intel’s gross margin fell about 600 basis points quarter over quarter, underscoring the cost of shifting more toward data center supply.
- He said Intel’s foundry progress and packaging technology still matter, but investors are losing patience while peers keep beating and raising guidance.
- Amazon’s AWS growth at 39% matched expectations rather than beating them, which helped explain the after-hours selloff.
- The analyst said Amazon’s planned AWS growth above 40% in 2027 and 2028 still looks strong despite near-term cash flow pressure.
- He warned that higher rates and resistance to new data centers could delay expansion and keep projected cash flows from materializing on time.
Notable quotes
“the massive misses on the 4Q guide is just uh pretty surprising”
“they cannot get enough supply there to sell more in the into the data center and the headwinds from the PC are large enough”
“We finally had Intel getting to sort of the mid40s after a few quarters of really good work”
“we really like those 40% numbers”
“what has changed in the last um I would say 6 months or so are twofolds”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.
Shares of Intel down more than 20% right now. This after its revenue forecast missed analyst estimates. that was hurt by sputtering demand for PC processors and supply chain problems with its lucrative data center components.
I want to bring in Kunjan Sabani, senior semiconductor analyst for Bloomberg Intelligence. Kungan, this stock was up 150% going into today's print, but still uh 20% haircut is a big haircut no matter which way you look at it. What's your take on this print?
Yeah, I mean, look, the the massive misses on the 4Q guide is just uh pretty surprising. Um we all knew that the PC market is not looking that strong but the results that came in are again surprising. Um at at least from what we have seen so far, it looks to me that you know the data center which was a beef is looking strong but they cannot get enough supply there to sell more in the into the data center and the headwinds from the PC are large enough that whatever they are able to get more supply on the data center side and get a bead, it's not large enough to offset.
Uh one more key important point here is that gross margin uh miss uh that's very substantial. We finally had Intel getting to sort of the mid40s after a few quarters of really good work. And so we are back down again with almost 600 plus basis point of a decline quarter over quarter.
That's substantial. We think that's again coming from Intel trying to get more supply and push more on the data center side which is where the future is.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- intel earnings
- pc processor demand
- amazon capex
- e-commerce growth slowdown
- supply-chain issues
Companies and tickers mentioned
- INTC
- AMZN
- Intel
- Amazon
- Schwab IMPACT
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Intelligence
-
Instant Reaction: Nvidia CEO Jensen Huang Ousted by Nvidia Board | Bloomberg Intelligence -
Nvidia’s Huang Ousted by Board in Move That Roils AI Economy | Bloomberg Intelligence -
CoreWeave Shares Soar After AI Computing Firm Eases Debt Fears | Bloomberg Intelligence -
Anthropic Targets $1.4 Trillion Valuation in Blockbuster IPO | Bloomberg Intelligence -
Nvidia Probe Into CEO Affair Raises Thorny Questions for AI | Bloomberg Intelligence -
Election 'Blue Wave' & Your Wallet; Navigating AI-Driven Market Volatility | Bloomberg Intelligence
Bloomberg Intelligence, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
