Ten years ago, companies were trying to calculate the return on investment in emerging technologies such as cloud computing and Big Data. Today, they face a similar challenge with artificial intelligence (AI), which remains largely a cloud and Big Data issue. Companies are evaluating how to adapt to these new technology trends.
During the notebook resurgence in 2014, Intel's situation was much better. In August of that year, the company's stock hit $32.82, following a recovery after the iPad-induced crisis. However, after a 26% drop on August 2 and a subsequent negative trend in the stock market, Intel shares are down nearly 40% compared to a decade ago.
The latest blow to Intel followed the announcement of an aggressive cost-cutting plan, which included eliminating 15,000 jobs and suspending dividends. In addition, the company's financials took a hit, with a 38.7% decline in adjusted gross margins in the second quarter compared to a year earlier. These problems are largely attributed to the pressure to remain competitive in the AI PC market, where Qualcomm has emerged as a significant competitor.
According to experts quoted by Estadao, Intel only managed to ship more than 15 million Meteor Lake chipsets equipped with AI processors, thanks to manufacturing in Ireland, where production costs are high. The next generation of chipsets, Lunar Lake, will be manufactured mainly in TSMC's facilities, which also entails additional costs due to outsourcing.
The situation is expected to improve with the Panther Lake generation, scheduled to launch in 2026. At that time, Intel expects to recover its in-house production capacity and, with it, improve its profit margins.
However, the future of CEO Pat Gelsinger, who has led Intel's restructuring attempts, remains uncertain. Over the past decade, Intel has fallen from 53rd to 79th on the Fortune 500 list. Likewise, in the 2014 Fortune Global 500, the company ranked 195th, but on this year's recently released list, it has dropped to 261st.
Intel's current situation reflects the challenges of a company that, despite its history of success, faces an uncertain outlook in a constantly evolving technology market.
