Episode summary
Intel Shares Plunge After Outlook Hit by PC Slump, Supply | Bloomberg Intelligence
Bloomberg Intelligence
· · 22 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Kunjan Sobhani, Poonam Goyal, Vincent Piazza, Emily Nicolle
Summary
Intel’s sharp selloff followed a weak outlook that Kunjan Sobhani said reflected more than just a bad quarter: PC demand is still Intel’s biggest revenue driver, and memory shortages plus higher memory prices are squeezing the entire PC supply chain. He said data center and server CPU demand remains strong, but supply constraints are limiting how much Intel can ship, leaving too little offset to soften the PC slump. Even so, he said Intel’s data center and AI business beat estimates and management still expects total revenue growth in 2027, with that improvement tied largely to DCI.
Poonam Goyal said Amazon’s post-earnings decline was driven less by a weak operating story than by rising capital spending and the pressure that puts on free cash flow. She argued the core e-commerce business remains healthy, with grocery a notable strength, while AWS growth is still accelerating. The market’s focus, she said, is on how high capex rises from here and whether Amazon funds it through debt or equity, given her view that free cash flow could stay negative or suppressed for years.
Vincent Piazza said Exxon Mobil and Chevron are benefiting from unusually strong refining margins and robust cash generation, but he is becoming more cautious on the earnings path into 2027 as prices and valuations approach what may be a peak. Later, Emily Nicole said a Binance hack that stole about $6 billion looks contained so far, though it reinforces crypto’s security risks even as institutional ETF flows remain positive.
Key takeaways
- Kunjan Sobhani said Intel’s PC weakness is hitting both revenue and gross margin because PC processors are still its largest and highest-margin segment.
- Sobhani said Intel’s server CPU demand is still strong, but wafer and substrate supply constraints are limiting the offset from data center growth.
- Poonam Goyal said Amazon’s e-commerce business remains healthy, but investors are reacting to higher capex and a longer period of suppressed free cash flow.
- Goyal said Amazon Web Services is still accelerating, yet the stock is trading on the path of future spending rather than current cloud strength.
- Vincent Piazza said Exxon Mobil and Chevron are posting record refining results, but he is getting more cautious on 2027 earnings as oil benchmarks and valuations run hot.
- Emily Nicole said the Binance hack appears contained for now, though it underscores the risk trade-off for direct crypto ownership.
Notable quotes
“we didn't expect this kind of a weakness which is really hurting them”
“the supply constraints on the wafer side on the substrate strides are really limiting on how much they can ship”
“the combination of memory prices being so high makes you know the bomb the bill of materials to build a PC higher”
“the real issue and why the shares are trading off”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts or watch us live on YouTube. I want to dig into Intel a little bit more because you look at that move today down 28%. This is of course uh after we saw Alphabet lose about a quarter of its value as well uh due to disappointing earnings.
Kungjan Sabbani is Bloomberg Newses uh sorry Bloomberg Intelligence is senior semiconductor analyst and he joins us now from San Francisco. And this is not good news especially when you consider Kungjan that the US government that is taxpayers owns a big chunk of Intel as well. I forgot about that.
Yeah, I mean look, there was a lot of surprises on the negative side. Um, you know, we didn't expect most people were aware PC market does not have like strong tailwinds but we didn't expect this kind of a weakness which is really hurting them cuz even as of last quarter PC remains the largest revenue segment for the company and remember it's also the highest gross margin one of the highest gross margin segments. So any revenue loss there really impacts the top line as well as the gross margin.
the the only sort of good news is that their server CPU demand continues to stay strong but however again the supply constraints on the wafer side on the substrate strides are really limiting on how much they can ship so there's not enough offset coming from data center or not enough goodness coming from data center to offset all the weakness in the PCs
What's going on with the PC market what's the the drivers there — Yeah I mean so we are all aware about the memory crunch happening right so what's happening is most of the memory players are allocating their capacity towards the better ASV better margin high growth data center market.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- intel earnings guidance
- pc processor demand
- amazon capex and aws growth
- oil refining margins
- bitcoin security hack
Companies and tickers mentioned
- INTC
- AMZN
- CVX
- XOM
- Intel
- Amazon.com Inc.
- Chevron
- Exxon Mobil
- Binance Holdings
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.
