Shares of Intel Corp dropped by over 6% this week after the upbeat results of chipmaker were overtaken by worries that AMD Inc (Advanced Micro Devices) might be chiseling off-market stakes from its high-margin business for a data center.
The firm’s revenue and profit overtook Wall Street expectations, but double-digit development in its business for data center chip disappointed investors and fell short of experts’ anticipation. “Intel share carries to be below stress as investors are grappling with the storyline of possible future loss of loss for AMD and looking past near-term outperformance,” analysts at Barclays claimed.
Intel was at the vanguard position of selling processors employed in making servers where information is stored distantly or in supposed cloud servers. Over the last couple of years as more firms rushed to the cloud to shift data online, Intel took pleasure of healthy profits.
Amazon (which beat profit expectations last week owing to its cloud business) and Microsoft have been the main recipients of the cloud acceptance. The Xeon family of server processors by Intel had a near-domination of the sector but began to face rivalry in 2017 after smaller rival AMD made a re-entry in the server business with EPYC 7000 series chips after a decade.
On a related note, Intel recently claimed that it plans to obtain eASIC, a small chip manufacturer, which will assist further Intel’s attempts to branch out from CPU processors.
Intel did not reveal that terms & conditions of the agreement for eASIC. The latter is situated in Intel’s home-ground of Santa Clara, California. A spokesperson of Intel claimed that the cost was not material, but that almost 120 individuals will join Intel’s supposed programmable solutions group due to this deal. The programmable processor team grew out of Intel’s $16.7 Billion acquirements of chipmaker Altera Corp.