Speaker 1: Bloomberg Audio Studios, podcasts, radio news from Mahard.
Speaker 2: We're Innovation, Money and Power.
Speaker 1: Collie in Silicon Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: Live from San Francisco. To our TV and radio audiences
Speaker 3: around the world. Welcome to a special edition of Bloomberg Technology.
Speaker 1: I'm Ed Ludlow.
Speaker 3: In just a few moments, Intel CEO Pat Gelsinger will
Speaker 3: join us for a live interview following their latest earnings report,
Speaker 3: the company giving a fourth quarter revenue forecast slightly above estimates,
Speaker 3: but sparking optimism that Intel is capable of reclaiming some
Speaker 3: lost market share in keycages.
Speaker 1: The shares are really surging.
Speaker 3: But it's also important to note two other giants of
Speaker 3: the technology world have also reported numbers this evening. Apple,
Speaker 3: the world's most valuable company, down two percentage points in
Speaker 3: after hours. It grew in every geography around the world,
Speaker 3: apart from in Greater China. iPhone revenue overall beat there's
Speaker 3: much to unpick there. Amazon gave a strong forecast for
Speaker 3: the final three months of this year, whether it's on
Speaker 3: an operating income basis or a revenue basis, and a
Speaker 3: return to growth in its cloud unit AWS. There is
Speaker 3: some signal that Amazon is regaining momentum. We will check
Speaker 3: in on all three names throughout the thirty minutes, but
Speaker 3: a focus right now is in Intel. It had a
Speaker 3: painful third quarter gone and it's given us a signal
Speaker 3: about what might come next. Let's first of all, go
Speaker 3: to Bloomberg's senior executive editor, Tom Giles, who leads technology
Speaker 3: coverage in the newsroom.
Speaker 1: Where to start.
Speaker 3: You know, Intel has moved on really from a painful
Speaker 3: third quarter and tried to tell us that it's regaining
Speaker 3: footing going fullwood.
Speaker 1: Take it from that.
Speaker 4: Tull slightly Slightly is the key here. A lot of
Speaker 4: what they did in the most recent quarter was they
Speaker 4: slash costs, slashed expenses, They cut headcount. They have taken
Speaker 4: a step back on investor payouts, so a lot of
Speaker 4: this is about retrenching. They did give a forecast for
Speaker 4: the fourth quarter that slightly exceeded analysts expectations. That was
Speaker 4: enough to get the stock moving. It's definitely up and
Speaker 4: after hours, but I look at the report and I
Speaker 4: see that they are not out of the woods yet
Speaker 4: by any stretch of the imagination. I look at their
Speaker 4: orders for AI chips. There's still not a lot of
Speaker 4: momentum there. They're not going to meet that five hundred
Speaker 4: million dollar threshold that they had talked about. We are
Speaker 4: still wondering about whether there's going to be interest after
Speaker 4: the election from an outside company. Bloomberg has reported on
Speaker 4: Qualcomm and their potential interest in an Intel deal. We've
Speaker 4: also reported that they're going to put that off until
Speaker 4: after the election, maybe not see a lot of movement
Speaker 4: there until after the new year. This was an investors
Speaker 4: are breathing a sigh of relief. But Gelsinger still has
Speaker 4: a lot of explaining to do and a lot of
Speaker 4: expectations that he still needs to live up.
Speaker 3: To, and we will get the opportunity to put those
Speaker 3: questions to him. Bloomberg, Tom Giles, thank you, stay with us.
Speaker 3: I want to bring in Bloomberg's Ian King, who's led
Speaker 3: semiconductor coverage in the Bloomberg newsroom since nineteen ninety.
Speaker 1: Eight and for a lot of that time.
Speaker 3: In all seriousness, Intel has led in certain products, right
Speaker 3: chips that go into PCs in some sense data center.
Speaker 3: But the quarter that just happened, their third quarter was painful.
Speaker 3: Billions of dollars of impairment charges, headcount reduction. Take that
Speaker 3: and explain why it's so important for this chip company
Speaker 3: to have taken those actions.
Speaker 5: Yeah, I mean Pat Gelsing has spelt it out. He said,
Speaker 5: we are resizing the company for the size of revenue
Speaker 5: that we expect going forward. And going forward we expect
Speaker 5: maybe three to five percent growth. If we push it,
Speaker 5: maybe we'll get into the sort of seven percent range.
Speaker 5: So that is a long way off what Intel's direct
Speaker 5: compares are doing right now, particularly in that AI chip market.
Speaker 3: Ian one more to you please. You spoke to Pat
Speaker 3: Gelsinger on the phone very quickly. Their business is split
Speaker 3: in two. There's the chips that they make that go
Speaker 3: into Pcason data centers. Then there's the manufacturing business. Gelsinger
Speaker 3: explained to you sort of the plan to run them
Speaker 3: as distinct divisions, but within one whole company.
Speaker 5: Yeah, he's talking about them being sort of better to
Speaker 5: be split but still together, which he was asked about
Speaker 5: again on the call, And people are still kind of
Speaker 5: struggling with this. It's like, well, how come if you're
Speaker 5: splitting them up, you're not going to go the whole
Speaker 5: way and split up the company and His point is like, no, no,
Speaker 5: we need to manage the overall finances and guess what,
Speaker 5: the majority of work that's going to be done in
Speaker 5: those factories is go to be our chips for the
Speaker 5: next couple of years.
Speaker 3: That's the Bloomberg News reporting on the numbers that Intel posted.
Speaker 3: You see them on the screen there, thanks to Bloomberg,
Speaker 3: Zy and King. Let's get reaction from the investment community.
Speaker 3: Joanne Feine is Advisor's capital management partner and portfolio manager
Speaker 3: actually currently with no exposure to Intel, but you're someone
Speaker 3: who's covered semiconductors semi capital equipment for many years at
Speaker 3: multiple firms. Just your reaction to the Intel print and
Speaker 3: what they told us about their progress.
Speaker 6: You know, they made a lot of progress, and that's
Speaker 6: an important step forward. They had a lot of cost
Speaker 6: cutting to do. They seem like they got a lot
Speaker 6: of it done last quarter, which is why we're seeing
Speaker 6: such a big charge, which had a large impact on
Speaker 6: that adjusted EPs. But you know, as Ian just said
Speaker 6: that they have a long way to go because they
Speaker 6: are taking a huge hit on their gross margin by outsourcing,
Speaker 6: and that reflects the lack of execution in the past
Speaker 6: on the manufacturing side.
Speaker 1: And it isn't just to an end.
Speaker 6: We didn't get good news about that this quarter. It's
Speaker 6: in fact really not going to play through until twenty
Speaker 6: twenty six when they rant Panther Lake in real volume.
Speaker 6: And even then, on the call, Pat Gelsinger said that
Speaker 6: seventy percent will be in house, but thirty percent will not,
Speaker 6: And I think that's a smart business decision. They have
Speaker 6: to be a reliable provider of that chip, and if
Speaker 6: there's any kind of hiccup in the yields they're going
Speaker 6: to get on Panther Lake, they had better have another
Speaker 6: source so they can meet their customer demands. But you know,
Speaker 6: the gross margin is everything. They've gone from over sixty
Speaker 6: percent down to under forty percent. Yes, and that's because
Speaker 6: they haven't executed.
Speaker 1: Now.
Speaker 6: I've always said that if somebody can write the ship,
Speaker 6: it's Pat Gelsinger, a former Intel guy and back at
Speaker 6: the Helm, and he's made incredible progress. He and Dave's
Speaker 6: Inzer have made incredible progress here this last.
Speaker 3: Quarter, and the stock is markedly higher and after hours.
Speaker 3: In a minute, I'm going to ask Ian about that
Speaker 3: kind of history of Intel and its leadership in the
Speaker 3: field of semi conductors. AI accelerators. Those are the GPUs,
Speaker 3: the high performance chips that we've all been talking about,
Speaker 3: because they go into data centers and they use to
Speaker 3: train AI models. And what Intel told us is that
Speaker 3: their version of that Goudy is not getting traction nowhere
Speaker 3: near the traction frankly that in video and AMD to
Speaker 3: a lesser extent of getting What did you make of that, Joan.
Speaker 6: Yeah, they're a distant follower and it's going to take
Speaker 6: them a lot to really make any inroads there. And
Speaker 6: it isn't just in video and AMD's new products, but
Speaker 6: it's also custom silicon that are coming out of the
Speaker 6: cloud guys themselves, like Google for example, working with Broadcom,
Speaker 6: Open Ai also evidently working with Broadcom. So there's a
Speaker 6: lot of players already there that have really outstanding products
Speaker 6: and you can see that in their soft guidance for
Speaker 6: twenty twenty five. They're targeting three to five percent revenue growth.
Speaker 6: That's what they're managing the business to and that really
Speaker 6: does reflect the different opportunity Intel has. It isn't just
Speaker 6: the AI accelerators, it's also that they've lost so much
Speaker 6: market share in server to AMD Okay. They used to
Speaker 6: be ninety seven percent. Now they're just around forty percent.
Speaker 3: Those are one of the questions that we'll get to you, Dranfeeni,
Speaker 3: stay with us for a moment. I want to go
Speaker 3: back to Bloomberg's Ian King. Historically, Intel was the leader
Speaker 3: in the product categories, but also in its margins. It
Speaker 3: was a company that had sixty percent margins or above.
Speaker 3: That is not the case anymore.
Speaker 5: Why Historically, what the massive advantage that they had was
Speaker 5: the best factories in the industry. Right These factories coust
Speaker 5: multiple tens of billions of dollars to put in the ground.
Speaker 5: But if they're good and if they give you better products,
Speaker 5: that's an asset. Right now, that is the reverse where
Speaker 5: they are not the best and they are weighing on
Speaker 5: the margins. And as we talked about it, and that
Speaker 5: was all of the questions they got, when are these advancements?
Speaker 1: Were the answers, well, two years.
Speaker 3: And what do you mean by So there's this foundry business,
Speaker 3: and part of it is serving Intel. They're their own
Speaker 3: biggest customer in the first instance, but they've named some
Speaker 3: pretty impressive people out there that they hope to manufacture
Speaker 3: chips for. There seems to be now a timeline building
Speaker 3: and when that might happen.
Speaker 5: Yeah, I mean the optimistic view is like, now we've
Speaker 5: made our factories great again. Now they're good. That'll help
Speaker 5: our products and it will also help us attract outside money.
Speaker 5: The analyst are turning around and saying, well, when and
Speaker 5: what's happening in the interim is, as Johanne said, they're
Speaker 5: still outsourcing a big chunk of their best stuff. So
Speaker 5: obviously that's horrendous margins and it has the negative impact
Speaker 5: of if you've got factories and you're not running them
Speaker 5: flat out making your best stuff, that's not a place
Speaker 5: where you want to be in this.
Speaker 1: Industry, Joanne.
Speaker 3: When I moved to California six years ago, Intel was
Speaker 3: part of the law and history of Silicon Valley. It's
Speaker 3: why people speak about them in that respect. In the
Speaker 3: court of gone, they took very painful decisions. And when
Speaker 3: I posted on social media that Pat Gelsinger was doing
Speaker 3: this special program, many voice support for him, but did say, look,
Speaker 3: there are some very difficult questions we still have. What
Speaker 3: would your difficult question be for him?
Speaker 6: How are you going to bring that gross margin up?
Speaker 6: And I guess the second one, and related is how
Speaker 6: do you convince potential foundry customers that they're going to
Speaker 6: get priority in those wafer starts when they need them?
Speaker 6: And that's always been the challenge in eras past. When
Speaker 6: Intel has talked about starting a foundry business, the concern
Speaker 6: among potential customers was, how do we know we're going
Speaker 6: to get the wafer starts that you promise us? How
Speaker 6: do we know you're not going to prioritize your own products?
Speaker 6: And then secondly, do they have the extensive libraries that
Speaker 6: they need to build chips for other companies? And that's
Speaker 6: a set of libraries that obviously have built up over many,
Speaker 6: many years and decades at TSMC and Samsung, But it's
Speaker 6: a new thing for Intel, and can they execute to
Speaker 6: build other companies' products as well as they do for
Speaker 6: their own.
Speaker 3: Amtheenia of Advisors, Capital Management, and of course Bloomberg's Ian King.
Speaker 3: Thank you to you both. Now we are joined by
Speaker 3: the Intel CEO, Pat Gelsinger, who's come straight from the
Speaker 3: company's call with analysts. Kindly, you are joining us live
Speaker 3: on Bloomberg Television and Radio, and Pat, thank you for
Speaker 3: your time.
Speaker 1: In the quarter gone.
Speaker 3: We were just talking about how you made painful decisions,
Speaker 3: and those showed up as impairment charges and were reflected
Speaker 3: on the bottom line to start, Could I ask if
Speaker 3: that's it now that those actions are taken and you
Speaker 3: now have line of sight on what you want to do,
Speaker 3: or if there will be more sort of restructure to come.
Speaker 7: Yeah, we worked very hard this quarter to get this
Speaker 7: done and the people actions, the restructuring chargers you'll largely
Speaker 7: finished this quarter, so it was a challenging quarter that way,
Speaker 7: but to also deliver better than expect the results if
Speaker 7: we eliminate those one time chargers and to take our
Speaker 7: guidance up for Q four.
Speaker 2: I'm very proud of our team being able to do
Speaker 2: both of those this quarter.
Speaker 7: Some of the most difficult restructuring charges maybe in the
Speaker 7: history of Intel since our memory microprocessor decision almost forty
Speaker 7: years ago. Getting that done and still beating results and
Speaker 7: taking the guide up, this was a very significant quarter
Speaker 7: for our team to execute. Very proud of their discipline results.
Speaker 3: Pat the investor base of cheering you. I'm going on
Speaker 3: the reaction of your stock in after hours, but a
Speaker 3: lot of that does seem to be a focus on
Speaker 3: what you were guiding to in the final three months
Speaker 3: of this year. Away from sort of the financials and numbers,
Speaker 3: could you talk a little bit about the product business
Speaker 3: and the foundry business that gave you some confidence in
Speaker 3: that guide.
Speaker 7: Yeah, and if we take it apart a little bit,
Speaker 7: the client business, we've launched our lunar Lake product, the
Speaker 7: second generation of our AIPC and the AIPC category very solid.
Speaker 7: We'll be launching the commercial version of that into a
Speaker 7: good market, believe next year for a Windows refresh, a
Speaker 7: corporate refresh cycle, and we start to see more strength
Speaker 7: in the AIPC category overall, with strong set of use
Speaker 7: cases and ISVs bringing new software into the marketplace. So
Speaker 7: we feel good about the client business. Data center quarter
Speaker 7: on quarter a little bit better than people forecast for
Speaker 7: that business, and a stronger product line with our Xeon
Speaker 7: six products now starting to ramp, you know. And finally
Speaker 7: on the Intel foundry quarter and quarter growth in that area,
Speaker 7: and a strong pipeline of external customers. We announced Amazon
Speaker 7: and two other AT and A customers, some additional advanced
Speaker 7: packaging customers. So we're starting to see that business come
Speaker 7: to life. And that's a long term business because when
Speaker 7: people move designs, it takes several years for major designs
Speaker 7: to move into our foundry. So we've been at it
Speaker 7: now a couple of years, and we're starting to see
Speaker 7: the results of those hard work and getting back to
Speaker 7: competitive process technology with AT and A. So a very
Speaker 7: good quarter of operational results.
Speaker 3: Pat we have a question from our audience, and that
Speaker 3: question comes from Clem DeLong, who's the CEO and founder
Speaker 3: of Hugging Face, and he makes the point that on
Speaker 3: his platform there are many more smaller models now available
Speaker 3: and it's leading him to have a question for you
Speaker 3: about Intel's place in the on device trend we're seeing
Speaker 3: with AI and how you're going to enable more on
Speaker 3: device AI use.
Speaker 7: Well, thank you, Clem, A great question, and a Hugging
Speaker 7: Face a great company, and you know, as you think
Speaker 7: about these models, you know we do see it moving
Speaker 7: from the training phase of you know, trillions of parameters
Speaker 7: to the inferencing phase, and exactly like the questioner says,
Speaker 7: in that inferencing phase, more of that will happen on
Speaker 7: prem for data center customers, and many of those smaller
Speaker 7: models will be retrained with enterprise's own data.
Speaker 2: A lot of those.
Speaker 7: Will just run on zeon need a special accelerator, or
Speaker 7: it'll be zeon plus an accelerator, but also then the
Speaker 7: edge use cases and AIPC use cases.
Speaker 5: Ed.
Speaker 7: I call it the three laws of the edge, right,
Speaker 7: the laws of physics, right, the.
Speaker 2: Speed of light.
Speaker 7: If I have to go to the cloud, I had time.
Speaker 7: Your second law is the law of economics, right, it's
Speaker 7: cheaper to run on my device. And finally the laws
Speaker 7: of the land. My data on my device in my
Speaker 7: data center. So we see it moving from a cloud
Speaker 7: training world to an edge and on prem world for
Speaker 7: inferencing for the future.
Speaker 3: I therefore have to ask you about GOUDI. Your AI
Speaker 3: accelerator did not get the traction that you'd hoped and
Speaker 3: you won't be making the outline target of five hundred
Speaker 3: million dollars in sales for this fiscal year or calendar year.
Speaker 3: Why is it a use case issue that the data
Speaker 3: center operators aren't looking at it or something else.
Speaker 2: Yeah.
Speaker 7: Two factors that we pointed out. One is is that
Speaker 7: now we have Gouty three coming out, so there's more
Speaker 7: enthusiasm for the next generation product that we're just starting
Speaker 7: to ramp now. The second one is the software and
Speaker 7: the software use cases the AI world has moved very
Speaker 7: rapidly and innovating very quickly, and the robustness and the
Speaker 7: completeness of the Gouty software stack hasn't been as great.
Speaker 7: And it's an accelerator, not a full reprogrammable GPU, so
Speaker 7: that makes some of the software porting and optimizations a
Speaker 7: bit more difficult. Obviously, as we get more of that
Speaker 7: running on Goudy, we solve the software problems. But secondly
Speaker 7: then it's also to move to a complete GPU capability,
Speaker 7: which we'll be doing out in time, and that development
Speaker 7: effort is also well underway, so we feel we have
Speaker 7: a solid position. The world is coming to more on
Speaker 7: prem and enterprise use cases. Like the last question ask
Speaker 7: and Gouty three good early indications from the marketplace and
Speaker 7: its success as we ramp it in twenty five.
Speaker 3: If you're just joining us on Bloomberg Television and Radio,
Speaker 3: we're live with the Intel CEO Pat Gelsinger. Pat Bloomberg's
Speaker 3: reported that arm and Qualcom, two of your peers, are
Speaker 3: interested in buying some or part of Intel. Can you
Speaker 3: confirm whether or not you received a formal offer from
Speaker 3: them or anyone else, and what Intel's consideration of them
Speaker 3: would be.
Speaker 7: Yeah, and Obviously, there's been rumors and churn in the industry,
Speaker 7: and I think all of that just indicates how important
Speaker 7: Intel is to the Intel into the industry structure and semiconductors,
Speaker 7: and how important those supply chains are.
Speaker 2: For the world.
Speaker 7: We don't view any of these rumors as particularly emeritus.
Speaker 7: We laid out a strategy, we reaffirmed that with our
Speaker 7: board of directors, and obviously, as we've taken these steps
Speaker 7: this quarter and restructuring and getting our costs where they
Speaker 7: need to be, we have the capacity to go on
Speaker 7: the journey that we've laid out to produce sustainable profitability
Speaker 7: and result in shareholder return. So with that, I'm committed,
Speaker 7: the team's committed, we have the board support for the
Speaker 7: strategy that we've laid out, and Q three shows that's
Speaker 7: exactly what we're going to do.
Speaker 3: But I've been trying to help our audience understand Intel's
Speaker 3: historic and current business right the products, but also foundry.
Speaker 3: And what you said was that twenty twenty six is
Speaker 3: when those third party customers start to show up. But
Speaker 3: could you just outline the path to that what you
Speaker 3: want to hold yourself to for next year in developing
Speaker 3: that business as a sort of standalone unit.
Speaker 7: Yeah, and it's a great question ed and clearly we've
Speaker 7: started to see that already emerge. And even this quarter
Speaker 7: we saw quarter and quarter growth of the external foundry business,
Speaker 7: largely driven by some of those early.
Speaker 2: Packaging design wins.
Speaker 7: So these advanced packages are sort of a faster on ramp,
Speaker 7: but ultimately it's becoming a wafer foundry for the d street.
Speaker 7: And as we said, three major design wins this quarter,
Speaker 7: you know, one with Amazon and two other compute use cases.
Speaker 7: So we'll be updating you know, the market as we
Speaker 7: win more of those customers and describing the lifetime deal
Speaker 7: value of those to the marketplace as well. So we'll
Speaker 7: give some of those breadcrumbs along the way. But it
Speaker 7: takes a couple of years for people to move these designs,
Speaker 7: a year to design it, a year to bring it
Speaker 7: into production until it starts to ramp in the marketplace.
Speaker 7: So key milestones for eighteen A that customers are now
Speaker 7: beginning those design cycles, the design tools, the design libraries.
Speaker 2: Are being moved over to eighteen A, but.
Speaker 7: It really isn't until twenty six that those results start
Speaker 7: to really help Intel's products. And then twenty six twenty
Speaker 7: seven until we start to see meaningful volumes externally.
Speaker 3: That way just days away from an election in this country,
Speaker 3: and I'm particularly interested in your assessment and planning for
Speaker 3: might happen to the Chips Act programs. Of course, I
Speaker 3: don't expect you to know what will happen in the election.
Speaker 3: You do not have a crystal ball. But former President
Speaker 3: Trump has kind of made disparaging remarks about President Biden's
Speaker 3: economic agenda. How are you planning for that?
Speaker 1: Please?
Speaker 7: Yeah, And I'd say maybe three different perspectives. Number One,
Speaker 7: the Chips Act was a bipartisan act and with that
Speaker 7: strong support from both sides of the aisle. And with that,
Speaker 7: we believe the importance of that in terms of industrial policy.
Speaker 7: The semiconductor industry is well supported by Congress and both parties. Second,
Speaker 7: we are disappointed by how long and how slow the
Speaker 7: dispensing of funds has been and well over two years
Speaker 7: at this point. I've invested thirty billion in capital and
Speaker 7: we've seen zero dollars of the Chips grants at this point.
Speaker 7: So we do believe that that has been too slow,
Speaker 7: and we're somewhat frustrated by that, and we've taken out
Speaker 7: of our financials four this year. That said Yil, there's
Speaker 7: also the Investment tax credit that we are seeing in
Speaker 7: It is much larger than the grant portion of the
Speaker 7: CHIPSAC and that is now law, and that will be beneficial.
Speaker 7: But clearly, I think whoever wins the election, the importance
Speaker 7: of this industry, the importance of rebuilding this supply chain
Speaker 7: of manufacturing is well supported. And Intel as a designer,
Speaker 7: R and D and manufacturer is unique in the United
Speaker 7: States and in the overall structure of the industry. And
Speaker 7: we expect the broad support rate of the administration regardless
Speaker 7: which party wins as a result.
Speaker 1: Thank you, Pat.
Speaker 3: Two quarters ago your CFO told me you were two
Speaker 3: over indexed to CPU, and we know what happened with Goudi.
Speaker 3: You made painful decisions in the court to gone reduce
Speaker 3: headcount by sixteen five hundred. Do you now have the
Speaker 3: plan in place and are you confident from here?
Speaker 7: You know, we laid out a clean sheet program that
Speaker 7: we went through to really benchmark the business. We took
Speaker 7: a conservative view of the funding plan, as we call
Speaker 7: it internally, saying you know, we're taking a modest growth
Speaker 7: outlook and we're building our cost structure to that very
Speaker 7: modest outlook, but we've also built now a lot of
Speaker 7: optionality to scale up into the business. We have a
Speaker 7: shell ahead where we have capacity that we can scale
Speaker 7: into if necessary, and we've made a smaller, more efficient
Speaker 7: Nimbre company that is able to execute with more agility
Speaker 7: and speed as well. So we feel like we're now
Speaker 7: well set up for the future. This was a challenging
Speaker 7: quarter for me for the company, but we feel like
Speaker 7: we're well set up for the future. And the good
Speaker 7: operational results that exceeded the markets expectations and the increased
Speaker 7: guidance for Q four, we feel like we're now in
Speaker 7: a very solid position.
Speaker 3: Intel CEO Pat Gelsinger, thank you for joining us here
Speaker 3: on this special bluebot technology straight from the analyst school.
Speaker 1: Appreciate your time.
Speaker 3: Thank you, ed like always, Okay, let's get more reactions
Speaker 3: to that conversation the numbers and what is the big
Speaker 3: earning story this Thursday Bloomberg Intelligence and this Congensabani who's
Speaker 3: just posted his reaction on the Bloomberg terminal saying details
Speaker 3: on two new eighteen eight customers will be key to
Speaker 3: offset pains from the third quarter pains that We've just
Speaker 3: been through extensively, Kunjan, But just go a bit deeper
Speaker 3: into your thesis and your reaction to what Pat said.
Speaker 8: Yeah, this is a name that I struggled with most
Speaker 8: ed there were a lot of positives. If you want
Speaker 8: to take a positive view, right, they came in slightly better.
Speaker 1: You have to if you want to.
Speaker 8: But to be fair, they came in slightly better than
Speaker 8: feared on most top line Q three, Q four, the
Speaker 8: free cash flow target is moving in the right direction.
Speaker 8: The gross to netcapax, the ratio is improving. But at
Speaker 8: the same time, we thought the gross margin floor was
Speaker 8: sort of something they already said last quarter. Right, so
Speaker 8: we have this massive significant impairment charges. Yes, you can
Speaker 8: ignore that, and the gross margin was better than a
Speaker 8: bit of there, but you have to make sure, right,
Speaker 8: how many times are we going to draw this clean
Speaker 8: sheet and go on?
Speaker 3: From their AI accelerators, the chip that everyone talks about,
Speaker 3: Goudie's not getting traction. They won't make five hundred million
Speaker 3: dollars in sales this year. What was your reaction to that.
Speaker 8: That's part of sort of the negatives out of today, right,
Speaker 8: the AI story doesn't seem to get any better In fact,
Speaker 8: this announcement makes it sort of slow down even more.
Speaker 8: Based on the implied guide of for DCAI, it seems
Speaker 8: that the share loss have not stopped. And on the
Speaker 8: other hand, you have the competitor AMD suggesting strong turing
Speaker 8: ramp next quarter, right versus a flatish guide from Intel.
Speaker 8: So that tells me both in CCG and Data Center
Speaker 8: that the share loss have not stopped yet.
Speaker 3: Bloomberg Intelligence analyst can Jensavanni, we just talked about his research,
Speaker 3: but check it out on.
Speaker 1: The Bloomberg terminal.
Speaker 3: I want to get the final word with Bloomberg Senior
Speaker 3: executive editor Tom Giles, who has led this news rem
Speaker 3: for a long time.
Speaker 1: Interesting interview.
Speaker 3: I think, you know Pat Gelsia coming clean on how
Speaker 3: it is, but he still projects confidence.
Speaker 1: I just watch you.
Speaker 4: My overall takeaway from that conversation with Pat was he's
Speaker 4: really trying to accentuate the positive. He acknowledged it's difficult
Speaker 4: to cut sixteen five hundred jobs. They made some really
Speaker 4: hard decisions in the quarter. At the same time, he's
Speaker 4: being as honest as he could about the AI outlook.
Speaker 4: You need to have if you're a ship maker right now,
Speaker 4: you need to be able to sell an AI story
Speaker 4: and Intel is just not doing that right now.
Speaker 3: Ian King has been sending the headlines we're reporting on
Speaker 3: the terminal right that this is difficult, but they demonstrated progress.
Speaker 3: Bloomberg's Tom Giles, who leads the news room here at
Speaker 3: Bloomberg Technology, thank you very much. This was part of
Speaker 3: a mega earnings period. Right when it comes to the megacaps,
Speaker 3: Intel's still the story.
Speaker 1: It's up eight percentage points.
Speaker 3: Apple, the world's most valuable company in Amazon also reports.
Speaker 1: But the movements in.
Speaker 3: There after hours stock was a little bit more muted
Speaker 3: and a difficult one. Intel up eight percent. It's an
Speaker 3: interesting one.
Speaker 2: You know.
Speaker 3: I don't know whether or not investors will stay with
Speaker 3: the momentum in the stock. If they believe it, they
Speaker 3: will have to. I guess Tom Giles digest what Pat
Speaker 3: Gelsinger told us.
Speaker 4: Yeah, absolutely. I mean it's surged a lot, it's come
Speaker 4: back a little bit. I think as the market as
Speaker 4: the reality sinks in that they've got a tough row
Speaker 4: to hold ahead. And it's just it's there was not
Speaker 4: enough in this story to say that Intel is in
Speaker 4: the clear, and I thought Pat was upfront about that
Speaker 4: as much as he really tried to accentuate how good
Speaker 4: things are going.
Speaker 1: Got it.
Speaker 3: Bloombg's Tom Giles again, Senior executive editor for Bloomberg Technology.
Speaker 1: We appreciate it.
Speaker 3: That does it for this edition, special edition of bloombate Anology.
Speaker 3: We'll be back tomorrow morning and we'll review the entire thing.
Speaker 1: This is Bloomberg