Intel (NASDAQ:INTC) stock dropped to a new all-time low on Monday as investors fled the semiconductor industry over concerns that increasing interest rates and a more aggressive Federal Reserve would hurt profit margins.
Even though Intel (NASDAQ:INTC) was scheduled to present information about its following Meteor Lake CPUs at the Hot Chips 2022 conference, the stock dropped more than 4% by midday to $33.92.
It is anticipated that Pat Gelsinger, CEO of Santa Clara, California-based Intel (NASDAQ:INTC), will provide further details regarding the new chips, possibly including the use of other foundries like Taiwan Semiconductor (TSM), during his presentation at the conference.
Intel’s (INTC) stock price has dropped by more than 36% since the beginning of the year and by a comparable amount over the preceding 12 months.
As investors awaited second-quarter reports from Nvidia (NVDA) and Marvell (MRVL) later in the week, shares of many of Intel (NASDAQ:INTC) competitors, including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (AMD), and Marvell (NASDAQ:MRVL), plummeted more than 3% on Monday.
Joseph Moore, an analyst at Morgan Stanley who rates both firms at “equal weight,” has indicated that while each has potential weak spots (gaming for Nvidia and storage and enterprise for Marvell, respectively), the cloud and data centers are where they will really shine.
While Nvidia’s (NVDA) recent pre-announcement highlighted weakness in the data center, analyst Moore remarked that this was likely an “aberration,” and the long-term trajectory is still there.
While the statistics have considerably less downside, the stock has risen, Moore said in a note to clients. We maintain a [equal weight] outlook and are open to adding to positions on weakness. While we are constructive, a downturn in the semiconductor industry could provide a better entry point.
The next earnings release from Nvidia (NVDA) is scheduled for August 24.
Moore predicted a “mixed” outlook for Marvell (MRVL) due to an August 25 report noting several negative factors.
We generally expect excellent statistics here, considering lead times that have decreased marginally but are still long, the analyst said, adding that storage, enterprise networking, and possibly some inventory reduction in the cloud are areas to keep an eye on.
KLA Corp. (KLAC), Lam Research (LRCX), and ASML Holding (ASML) were all down at least 2.5% on Monday as the focus remained on the chip equipment manufacturers.
China has been critical of the U.S. CHIPS & Science Act since it was passed last week. The government claims that the measure threatens its ambitions to develop its own chip industry and violates fair market principles.
The Biden administration is investigating whether or not to restrict semiconductor equipment sales from companies like ASML Holding (ASML) and others to Chinese semiconductor producers.
Qualcomm (QCOM), Texas Instruments (TXN), Broadcom (AVGO), and Micron Technology (MU) were just some of the other chipmakers that witnessed significant falls on Monday, with each company’s stock down by 3% or more.
Citi, a leading global investor, kept its neutral rating on Advanced Micro Devices (AMD) and Intel (NASDAQ:INTC) last week, despite the bank’s warning that further drops in notebook shipments increase the possibility for further downside for both businesses.
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