Intel Corporation. INTC Executive Director Pat Gelsinger acknowledged investors' concerns following a significant drop in the company's share price.
What happenedGelsinger said the company is working diligently to address these concerns. He made the remarks during a fireside chat at Deutsche Bank's technology conference in Dana Point, California, CNBC reported. reported on Thursday.
“We respect some of the skepticism we've received from the market,” Gelsinger said. “We believe we're up to the challenge.”
Intel shares plunged 26% after a disappointing quarterly earnings report earlier this month, marking its worst day on Wall Street in more than 50 years. The stock has fallen more than 57% this year, trading near its lowest level in more than a decade.
Gelsinger noted that Intel faces challenges in its server business due to AI-driven weaknesses, but remains optimistic about the future. He highlighted the upcoming launch of Lunar Lake, which he described as “the most compelling AI PC product ever.”
Intel has hired advisers, including Morgan Stanley, to defend itself against scrutiny from activist investors. Gelsinger did not address the board member's recent departure. Lip-Bu Tanaccording to the report.
See also: Will NVIDIA surge more than 31%? Here are the top 10 analyst forecasts for Thursday
Earlier this month, Intel announced the layoff of 15,000 employees and possible portfolio cuts. Gelsinger believes these efforts will yield positive results, citing “signals” from the foundry's external customers.
In the latest quarter, Intel reported a net loss of $1.61 billion, compared with net income of $1.48 billion in the same period last year, with revenue falling short of estimates.
Why is it important?Intel's recent troubles are part of a broader context in the semiconductor industry. The departure of board member Tan was a significant development, as he left after disagreements with CEO Gelsinger and other directors over the direction of the company.
Tan, a veteran of the semiconductor industry, had joined Intel to help restore its status as a leading global chipmaker.
Moreover, Intel's job cuts come at a time when the company is competing for a $20 billion U.S. chipmaking subsidy aimed at creating thousands of manufacturing and construction jobs. This has drawn scrutiny from lawmakers, especially as the U.S. strategy aims to reduce reliance on Asian semiconductor technology.
Moreover, Intel's challenges come in the context of strong performance from competitors such as NVIDIA Corporation. NVDANvidia recently reported better-than-expected second-quarter earnings, further highlighting the competitive pressures facing Intel.
Nvidia's stock surge has also made many of its employees millionaires, reducing staff turnover to record lows. The chip designer is known for its demanding work environment, where employees work up to seven days a week, with hours stretching to 2 a.m.
Price action:Intel shares closed at $20.13 on Thursday, up 2.65% on the day. After the close, they were up 0.50%. Despite this, the stock is down 57.89% year-to-date. In contrast, Nvidia has seen a substantial rise this year, with an annual gain of 144.11%, and is currently trading at $117.59, according to Data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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