The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
ATFX
ATFX-search-icon
Client Portal
Start trading
rch

Intel Shares Slump on Chip Sector Outlook for CPUs

The price of Intel (INTC) shares slumped on Wednesday after a rival firm’s earnings rocked the market.

INTC – Daily Chart

INTC – Daily Chart

INTC shares dropped over 7% but clawed back some of their gains. The stock now has support at the $24.87 level.

Rival chipmaker Nvidia rocked the chip market with earnings that showed a net income of 26% higher, with higher revenue than expected. But the real story was a 50% increase in its second-quarter outlook. Analysts expected to see revenue around $7 billion in Q2, but management predicted $11 billion due to “surging demand” for its products. 

Analysts had questioned the company’s valuation after a 100% rally this year, but the stock surged another 20% after the release. 

The company is seeing a sharp increase in demand due to the artificial intelligence hype. The chip sector is also witnessing a change due to the technology required. 

Intel has led central processing units (CPUs) while Nvidia was in the graphics processing unit (GPUs) market.

Nvidia’s CEO Jensen Huang was also bullish on the outlook for GPUs. “The flashpoint was generative AI,” Huang told CNBC. “We know that CPU scaling has slowed, we know that accelerated computing is the path forward, and then the killer app showed up.” 

Nvidia’s earnings also reported a record for its data centre revenue, and the company added more gloom to the potential for Intel’s CPUs, saying that GPU data centres will be the future. 

“In 22 years of covering tech stocks and large-cap we have NEVER seen a guidance range of this magnitude on a large-cap tech name,” said Wedbush Securities analysts. 

Huang said Nvidia’s recent performance was down to “two simultaneous transitions” in accelerated computing and artificial intelligence. 

In the accelerated computing transition, we heard that Nvidia was also working with a UK university to build a supercomputer driven by its CPU. That could add competition for the likes of Intel. 

Traders can look for more downside on Intel as analysts and investors react to a sea change in the chip sector.

Last Updated: 26/05/2023

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

Recent news

Recent news
German Stocks Warn of a Potential High as Economy Falters

A collection of headwinds could hurt German stocks. GER30 – Weekly Chart The German stock ...

Recent news
Bitcoin Hits Resistance as Debt Ceiling Deal Nears

Bitcoin has hit another resistance level as the US nears a debt ceiling deal. BTCUSD – Dai...

Recent news
US Stocks Face Important Week with Debt Deal in the Balance

The US30 has dropped through support after Germany's disappointing GDP growth print. US30 ...

Recent news
EURGBP in Focus with European Economic Data

The price of EURGBP could see volatility as the pair has European economic data released. ...

Recent news
US Dollar Index Softens Ahead Of Key Data Release This Week

On Tuesday, the US dollar paused at 104.51, soft against a basket of major currencies but ...