Intel Narrowly Beats On Q3 Earnings, But Shares Sink On Weak Datacenter Sales
Bob Swan, Intel CEO, reported that Intel’s “teams delivered solid third-quarter results that exceeded our expectations despite pandemic-related impacts in significant portions of the business.” At present, Intel is predicting growth through the end of 2020 as its “remain(s) confident in our strategy." Its goal is to provide "long-term value" through delivering "leadership products and aim to win share in a diversified market fueled by data and the rise of AI, 5G networks, and edge computing.”
Intel’s strategy may be for a long-term power play over AMD, but its close rival is making leaps and bounds in the marketplace in the short-term. In August, we reported that AMD’s market share was growing, hitting its highest market share percentage since 2013. This was before the Zen 3 launch, so it can be expected that the numbers for AMD will continue to grow.
Switching gears over to Data Center Group (DCG) revenue, Intel reported a decline of 10% year-over-year. AMD and NVIDIA have both become more assertive in the market, giving Intel some more competition. NVIDIA’s acquisition of Arm and the build-out of GPU compute units, alongside AMD’s presence in data-center processing certainly gives Intel a run for its money. However, Intel has other reasons to cite for the decline:
In the Data Center Group (DCG), Cloud revenue grew 15 percent YoY on continued demand to support vital services in a work and learn-at-home environment. At the same time, a weaker economy due to COVID-19 impacted DCG's Enterprise & Government market segment, which was down 47 percent YoY following two quarters of more than 30 percent growth.
For the full year, Intel is expecting revenue to hit a record $75.3 billion, which is slightly above its previous guidance of $75 billion. The company also raised earnings-per-share for the full year from $4.85 to $4.90.