It’s been a tough few years for Intel, and the past couple of weeks have proven especially harsh for one of Silicon Valley’s behemoths whose silicon crown has slipped many times over. The result is that Intel has a market capitalization now a little higher than the valuation of a charity. As an example, OpenAI closed its recent round of funding in February 2024 with a valuation estimated at $80 billion. Now, Intel’s market cap hovers at $81.19 billion or so as of today; roughly equal to the AI startup in question.
Intel and OpenAI at the Same Value
Intel got hammered in the stock market after reporting its Q2 2024 results last week, falling way short of both revenue and profit expectations. The DCAI (Data Centre and Artificial Intelligence) segment, which is Chipzilla’s growth engine dragged the company down too – suggesting that it has failed to take advantage of AI-driven momentum in this sector. Also of concern, Intel missed its own expectations for gross margin during the quarter and guided lower still going forward.
To hoard cash, Intel recently slashed its dividend and launched a second wave of mass firings; last year the company culled 5% of its workforce, this time lopping off almost another 13.6%, or upwards of 15,000 job slots out from under an estimated remaining roll call someday numbered just over 110,000 total souls.
Making matters worse, Intel’s 13th- and 14th-generation CPUs keep right on oxidizing themselves to submission due to too much voltage. The company plans to release an update to prevent further damage to unaffected CPUs and has extended the standard warranty on these processors from 3 to 5 years.
In the midst of these challenges, NVIDIA might be offering a lifeline to Intel. Recent reports suggest that NVIDIA could rely on Intel’s IFS to meet packaging needs for its H100 GPUs, as TSMC faces capacity constraints. Additionally, Taiwanese media is reinforcing claims that major US tech companies may outsource CoWoS-S solutions to Intel.
FAQs
Why has Intel’s market value dropped significantly?
Intel’s recent stock decline is due to poor financial results, missed guidance, and ongoing technical issues with its CPUs.
How is NVIDIA helping Intel amid its struggles?
NVIDIA may use Intel’s IFS for H100 chip packaging and is reportedly considering Intel for CoWoS-S solutions.
