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Intel's bad year worsens, with analyst decrying company as 'profoundly broken'

By Emily Bary Stock is one of the S&P 500's biggest losers this year Intel Corp.'s bad year is getting worse as the chip stock experiences another sharp slide in the wake of earnings. Shares of Intel (INTC) are down about 9% in Friday's midday trading after the company came up short with its revenue and margin outlooks for the current quarter.

"And while we believe they are doing everything they can to try to repair things it is clear that the company is profoundly broken, and it will take years to see the fruits of their (currently exhaustive) labor, with success in their endeavors far from assured amid execution difficulties and structural headwinds," he added. "Gross-margin expansion next year in the face of higher startup costs is dependent on revenue growth, yet we see the x86 market [total addressable market] as very low single-digit growth medium term with the shift to accelerated data centers continuing to benefit [graphics processing units], along with the looming threat of ARM gaining traction in the PC ecosystem," he wrote, while keeping his neutral rating and $40 target price. "The other positive nugget in the quarter was the revelation that its Gaudi 3 accelerator revenue would top $500 million this year in [the second half], implying a steep ramp and momentum into 2025," Reitzes wrote.

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