Episode summary
Earnings Special: Intel Plunges on PC Sales Slump & Amazon Slips | Bloomberg Surveillance
Bloomberg Surveillance
· · 14 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Kunjan Sobhani, Anurag Rana
Summary
Intel’s sharp post-earnings selloff was driven by a revenue forecast that missed estimates, with the analyst saying the shortfall came from weak PC processor demand and supply-chain constraints on data center components. He argued the bigger problem is not just top-line pressure: Intel’s gross margin slipped back after recent improvement, because the company is pushing harder into lower-margin data center and new-node manufacturing while PC weakness persists. He said investors should expect patience, but also questioned how long the market will tolerate repeated “one step forward and two steps back” progress on margins and foundry execution.
Amazon’s shares also fell after the company reported heavier capital spending and free cash flow pressure, even though AWS net sales excluding FX beat estimates and the company still forecast strong cloud growth into 2027 and 2028. The analyst said the market was disappointed that AWS merely met, rather than clearly beat, high expectations, but he framed the spending as necessary to support backlog and future cloud share gains. He added that rising interest rates and political resistance to data center buildouts are becoming bigger risks to the payoff from AI-related infrastructure spending.
Key takeaways
- The analyst said Intel’s 4Q guide miss was driven by weak PC demand and supply constraints that limited data center upside.
- Intel’s gross margin fell sharply again, which the analyst linked to a mix shift toward lower-margin data center shipments and newer nodes.
- The analyst said Intel’s foundry and packaging progress matters, but investors want material revenue to show up there soon.
- Amazon’s AWS revenue met expectations at 39%, but the analyst said the market wanted a bigger beat.
- The analyst said Amazon’s heavy capex and negative free cash flow are justified if cloud growth and margins hold over time.
- The analyst warned that higher rates and political opposition to data center builds could delay the AI capex payoff.
Notable quotes
“the massive misses on the 4Q guide is just uh very surprising”
“the data center which was a beat is looking strong but they cannot get enough supply there to sell more in the into the data center”
“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”
“they're expecting AWS sales to be above 40% um into 27 and 28”
“interest rates have gone up quite a bit. I mean you're looking at you know their people's ability to fund these expansion plans”
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- intel earnings
- pc processor demand
- amazon capex
- core e-commerce growth
- supply chain issues
Companies and tickers mentioned
- INTC
- AMZN
- SCHW
- Intel
- Amazon
- Charles Schwab
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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