Tue, Jan. 27, 9:22 AM
- After selling off yesterday in response to Seagate's guidance, Intel (NASDAQ:INTC) and HP (NYSE:HPQ) are showing steep losses in premarket trading today after Microsoft (NASDAQ:MSFT) reported 13% Y/Y drops in both its Windows OEM Pro and non-Pro revenue, and offered conservative guidance. Microsoft is down 8.3%, and Nasdaq 100 futures are off 1.4%.
- Microsoft blamed the Windows OEM Pro decline on slowing business PC demand (following a boost driven by the end of Win. XP support), an unfavorable mix, and academic discounts. The OEM non-Pro decline was blamed on a mix shift towards cheaper hardware for which the software giant has cut or eliminated Windows licensing fees.
- Microsoft's server/data center-related sales were healthier: Server product/services revenue rose 9%, and commercial cloud revenue (Office 365/Azure) grew 114%. But on the CC (transcript), the company stated transactional server revenue "was down primarily due to a declining traditional server market." A shift in demand towards Web/cloud data centers often relying on Linux servers might also be a factor here.
Mon, Jan. 26, 11:27 AM
- Seagate slightly missed calendar Q4 revenue guidance and guided for calendar Q1 revenue of "at least $3.45 billion," compared with a $3.59B consensus.
- The hard drive giant reported 4% Y/Y Q4 increase in PC drive shipments - notebooks were up, desktops were down - and a 17% increase in enterprise shipments (lifted by demand from Internet giants).
- Intel (INTC -1.8%), HP (HPQ -3%), and NetApp (NTAP -2%) are all selling off on a day the Nasdaq is near breakeven. Intel has already guided for its PC CPU division's sales to drop by a low-single digit % in 2015, but has also forecast its server CPU division's sales will see a 15% CAGR through 2018.
- Separately, the WSJ reports (citing an internal e-mail) HP has named a new leader for its H3C Technologies Chinese networking hardware unit, following worker protests. The paper reported in October HP wants to sell at least a 51% stake in the business, as China tries to cut its reliance on U.S. IT hardware in the wake of the 2013 NSA spying uproar.
Fri, Jan. 23, 9:15 AM
Thu, Jan. 22, 2:54 PM
- Amazon (AMZN +4.3%) has acquired Annapurna Labs, an Israeli chipmaker that has provided few details about the silicon it's working on. The NYT reports the purchase price is $350M. The WSJ previously reported of a $350M deal price, while adding the final tab could be $375M if certain conditions are met.
- According to the WSJ's sources, Annapurna is developing "midrange networking chips for data centers, offering improvements over existing products in terms of information-transmission rates and power consumption." Israel's Calcalist reports the company is developing "microprocessors that allow fast data traffic for low-power computing servers and storage servers." It also notes CPU core giant ARM (NASDAQ:ARMH) is an investor.
- AWS' data centers contain hundreds of thousands of servers running Intel (NASDAQ:INTC) x86 CPUs. Though Amazon has downplayed the efforts of 3rd-party ARM server CPU vendors, it has also hired several key engineers from defunct ARM CPU vendor Calxeda, a move that has fueled speculation Amazon is prepping its own ARM server chips. Annapurna could assist with the effort.
- The news comes on a day in which Piper has assigned AWS a ~$32B valuation.
- Earlier: Amazon rallies following eBay's earnings
Tue, Jan. 20, 9:46 AM
- "Our diligence with industry sources revealed that there has been a sharp reduction in server activity entering 2015," writes JMP, downgrading Intel (INTC) to Market Underperform and setting a $30 target five days after the chip giant's Q4 report. (source: Notable Calls)
- JMP adds there's a risk of excess server CPU inventory following a Q4 in which division sales rose 11% Q/Q and 25% Y/Y (easily outpacing PC CPU division growth of 3% Y/Y).
- Intel has forecast server CPU division sales will post a 15% CAGR through 2018, aided by strong Web/cloud and HPC server demand. PC CPU division sales, on the other hand, are expected to fall by a low-single digit % this year, after rising 4% in 2014.
- Shares are off modestly following the downgrade. Intel currently goes for 15x 2015E EPS.
- Update (10:35AM): Intel is now down 1.5%.
Fri, Jan. 16, 12:43 PM
- Intel (INTC -0.4%) is off fractionally after providing in-line revenue guidance and a soft gross margin forecast to go with a Q4 beat. Charter Equity has downgraded to Market Perform, and Stifel (Buy) has upped its target by $2 to $41.
- Not surprisingly, bulls are focusing heavily on the 25% Y/Y growth posted by Intel's server CPU unit (DCG). Jefferies: "To say DCG is a hidden gem is an understatement ... all four segments (Enterprise, Cloud, High-Performance Computing, Networking) posted growth. We think Intel’s new server cycle (Grantley) helps in 2015, but view drivers in DCG to be largely secular."
- Also going over well: Intel's 2014 capex ($10.1B) was below prior guidance of $10.5B-$11.5B, and its 2015 guidance midpoint is only at $10B. Wells Fargo observes the 2014/2015 figures are below 2011-2013 levels of $10.7B-$11B, even though "2015 revenue that is likely to be substantially higher than in any of these years."
- Those less positive often highlight slowing PC CPU growth. Ascendiant Capital thinks Q4 PC CPU division revenue ($8.9B, +3%) fell short of a $9.2B consensus. "It looks as though the upgrade cycle is tapering off and we expect a return of a secular declining PC market in 2015." Bernstein, reiterating inventory concerns: "Intel’s [PC] unit shipments still remain well above market data on a YoY basis, and account receivable DSOs increased sharply."
- Intel has guided for PC division sales to fall by a low-single digit % in 2015, following a strong 2014 boosted by an inventory refresh and share gains against AMD (AMD -4.2%). AMD, which reports on Jan. 20, is selling off today.
- On the CC (transcript) CEO Brian Krzanich stated Intel shipped 46M tablet CPUs in 2014, beating a goal of 40M, and that the company is committed to driving out $800M in mobile chip unit costs in 2015. Thanks in large part to heavy marketing subsidies, the unit posted a $4.2B 2014 op. loss.
- Prior Intel earnings coverage
- Update: With the help of a tech rally, Intel closed up 0.7%. AMD closed down 5.2%.
Fri, Jan. 16, 10:54 AM
- Arguing Intel's (NASDAQ:INTC) manufacturing process lead threatens Qualcomm's (QCOM -0.5%) mobile processor share, Drexel Hamilton's Rick Whittington has downgraded the mobile chip/IP giant to Hold, and cut his target by $25 to $75.
- Whittington observes Intel is now selling 14nm processors - its 14nm Cherry Trail tablet CPUs recently began shipping - while Qualcomm has just begun selling 20nm processors (made by TSMC). He adds top foundries are slow to ramp 14nm and 16nm FinFET processes - Samsung/Globalfoundries are rolling out the former, TSMC the latter - and that Intel "also appears set on commoditizing low-mid-range LTE [baseband modems] for incorporation in their mobile processor offerings, conjuring a price war."
- Worth noting: 1) While Intel has begun offering powerful app processors that leverage advanced manufacturing processes, it hasn't launched high-end baseband/app processors that can take on Qualcomm's Snapdragon 800 series. 2) A large portion of Intel's low-end efforts - both for app processors and baseband/app processors - are tied to alliances with Chinese chipmakers who (like Qualcomm) rely on 3rd-party foundries.
- Qualcomm is off modestly following the downgrade. FQ1 results arrive on Jan. 28.
Thu, Jan. 15, 4:33 PM
- Intel (NASDAQ:INTC) had a Q4 gross margin of 65.4%, +40 bps Q/Q and +340 bps Y/Y, above a guidance midpoint of 64%, and contributing heavily to its EPS beat. However, GM is expected to fall to 60% (+/- 2%) in seasonally weak Q1, and 2015 GM guidance of 62% (+/- 2%) is mostly below a 2014 figure of 63.7%.
- In its CFO commentary (.pdf), Intel states higher platform unit costs and higher factory start-up costs will respectively have 200 bps and 150 bps Q1 impacts on GM relative to Q4. Lower platform volumes will have a 100 bps impact, and higher platform write-offs (mostly related to the next-gen Skylake platform) a 50 bps impact.
- PC CPU division performance: Revenue +3% Y/Y to $8.9B. Volumes +6%, ASPs -2% (mix shift to Atom). Desktop volumes +1%, ASPs flat. Notebook volumes +11%, ASPs -3%. Op. profit +18% $3.98B.
- Server CPU division performance: Revenue +25% to $4.1B (boosted by the Grantley launch and cloud demand). Volumes +15%, ASPs +10%. Op. profit +39% to $2.23B.
- With marketing subsidies to OEMs still taking a toll, the mobile chip division posted a $1.11B op. loss on official revenue of -$6M. The IoT Group had revenue of $591M (+10%), and a $185M op. profit. Software/services had revenue of $557M (-6%), and a $25M op. profit. Everything else produced revenue of $617M (+23%), and had an op. loss of $856M (includes one-time costs).
- $4B was spent on buybacks vs. $4.2B in Q3. R&D/MG&A spend rose 4% Y/Y to $5B.
- The 2015 capex budget is at $10B (+/- $500M). At the time of the Q3 report, the 2014 budget was $11B (+/- $500M).
- INTC -1.2% AH. Q3 results, PR.
Thu, Jan. 15, 4:04 PM| 59 Comments
Wed, Jan. 14, 5:35 PM
Mon, Jan. 12, 5:58 PM
- IDC estimates global PC shipments fell 2.4% Y/Y in Q4 to 80.8M - a bigger decline than Q3 and Q2's 1.7%, but better than expectations for a 4.8% drop. Gartner is more positive, estimating shipments rose 1% to 83.7M.
- Both firms observe emerging markets, where tablet cannibalization remains a major issue, remain in worse shape than developed markets. IDC also states commercial PC demand (boosted earlier this year by MSFT's ending of Win. XP support) has slowed, and that "market progress has been fueled by low-priced systems, including growth of Chromebooks and [Microsoft's] promotion of Windows 8 + Bing."
- On the bright side, both IDC and Gartner report Asia-Pac returned to positive growth, and that broader consumer demand is gradually improving. The U.S. consumer market is expected to return to positive growth in 2015, aided by slowing tablet demand and the Windows 10 launch.
- IDC believes all top-5 vendors gained share from rivals with less scale. A quarter after cracking the top-5 for the first time with a 6.3% share, Apple's (NASDAQ:AAPL) unit share is believed to have risen to 7.1% (+130 bps Y/Y) on the back of 4.9M shipments (+18.9%). Given higher ASPs, revenue share might be around 15%.
- Market leader Lenovo's (OTCPK:LNVGY) share rose 140 bps to 19.9%; #2 HP's (NYSE:HPQ) rose 300 bps to 19.7%; #3 Dell's rose 140 bps to 13.5%; #4 Acer's (OTC:ASIYF) rose 40 bps to 7.7%. Non-top 5 firms saw their share drop 740 bps to 32.2%, with their shipments declining 20.7%.
- Intel (NASDAQ:INTC), which tends to have good visibility into industry demand, reports on Thursday.
- Related tickers: AMD, NVDA, STX, WDC, HTCH
Wed, Jan. 7, 2:27 AM
- Next at the Consumer Electronics Show in Las Vegas: Intel (NASDAQ:INTC) Chief Executive Brian Krzanich unveiled Curie, a new button-sized computer designed for smart clothes. The button includes Bluetooth radio and is due out later this year.
- The CEO also showed off a selfie-snapping flying camera and called the small wrist-worn drone Nixie.
- Other smart gadgets Krzanich commented on include an athletic wearable being developed with Oakley and smart glasses being worked on with Luxottica (NYSE:LUX).
Mon, Jan. 5, 12:17 PM
- Four months after launching its first 14nm Broadwell CPUs - the ultrabook/tablet-focused Core M line, also known as Broadwell-Y - Intel (INTC -0.5%) has rolled out over a dozen CPUs based on its Broadwell-U architecture, which targets mainstream notebooks and smaller desktops. Plenty of products featuring the chips should be shown off at CES.
- The dual-core CPUs will be sold under the Celeron, Pentium, and Core i3/i5/i7 labels, and (naturally) come with integrated GPUs. Most have an official max power draw (TDP) of 15W, but a handful have 28W TDPs and also come with relatively powerful Iris 6100 GPUs. The Core M line can deliver sub-5W TDPs.
- Intel claims a Core i7 Broadwell-U CPU can respectively deliver 22% and 50% increases in 3D graphics and video conversion performance over a comparable 22nm Haswell CPU, and (perhaps more notably) up to a 1.5-hour increase in battery life. Quad-core Broadwell parts aimed at tower desktops and high-end notebooks aren't expected until mid-2015.
- Rival AMD's (AMD -1.1%) most advanced PC CPU lines still rely on 28nm processes; the company has promised 20nm parts will arrive later this year.
- The launch comes as MKM makes a belated upgrade to Buy, and hikes its target by $5 to $45. "We likely kept our neutral rating (with positive bias) for too long as PCs stabilized, data center improved, and INTC demonstrated a flexible approach to succeed in tablets and access existing China consumer channels."
- MKM is also upbeat about server CPU demand, given new product cycles and strong cloud and big data-related demand. Intel has forecast its server CPU division sales will rise at a 15% annual clip through 2018. PC CPU division sales are expected to fall slightly in 2015, following a strong 2014.
- Also: Intel has bought a 30% stake in smart glasses maker Vuzix for $24.8M. The investment follows an alliance with eyewear giant Luxottica, and a WSJ report that the next version of Google Glass will sport an Intel CPU.
Thu, Jan. 1, 2:52 AM
- After failing to launch a Tizen-powered smartphone, Samsung Electronics (OTC:SSNLF) is now attempting to power every one of its Smart TVs in 2015 with its homegrown operating system.
- Together with Intel (NASDAQ:INTC), Samsung has been developing Tizen for years, with an initial focus of bringing the platform to its smartphones as an alternative to Google’s Android operating system.
Thu, Jan. 1, 2:19 AM
- Dow: INTC +41%; UNH +35%; HD +28%; CSCO +25%; MSFT +25%.
- S&P 500: LUV +125%; EA +106%; EW +95%; AGN +92%; AVGO +91%.
- Nasdaq: AAL +112%; EA +106%; AVGO +91%; GMCR +78%; ILMN +68%.
Dec. 30, 2014, 6:05 PM
- French carrier Iliad's (OTC:ILIAF) Online.net unit plans to launch a cloud infrastructure service next month that runs on servers featuring ARM-based (NASDAQ:ARMH) CPUs supplied by Marvell (NASDAQ:MRVL). Making good on ARM's promise of high densities, 18 servers - each sporting one quad-core CPU - can fit onto a blade, and 16 blades can fit within a chassis.
- Though it's no Google or Amazon, Iliad provides a useful reference win for ARM server CPU vendors as they try to take share from Intel (NASDAQ:INTC), whose Xeon CPUs claim the lion's share of the server market, including most Web/cloud data center deployments.
- Canaccord has forecast ARM server CPUs, still in their infancy, will grab a 20% share by 2018. Hyperscale data centers and application-specific server appliances are seen as areas where ARM-based solutions could stand out.
- Intel is looking to head off the ARM threat both by developing low-power Atom server CPUs, maintaining a manufacturing process edge, and (notably) providing a variety of custom CPUs to Internet giants such as Amazon, Google, Facebook, and eBay; the latest offerings are packaged with Altera (NASDAQ:ALTR) FPGAs to provide on-the-fly programmability.
- Nonetheless, Facebook's Open Compute Project supports both ARM and x86 CPUs, and Google has been reported to be thinking of building its own ARM chip. An Amazon VP recently stated ARM vendors aren't keeping pace with Intel. But Amazon might simply be opting to create its own ARM designs, given it has hired several key engineers from defunct ARM vendor Calxeda.
- Cavium (NASDAQ:CAVM) and AppliedMicro (NASDAQ:AMCC) are often viewed as ARM server CPU plays. AMD, Qualcomm, and Texas Instruments are also competing in this space.
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