Bloomberg Technology 04/26/2024

Intel's Financial Performance and Strategy

• Despite a strong Q1, Intel's stock price dropped due to tepid forecasts.
• Revenue met expectations, while earnings beat estimates.
• Intel is pursuing a foundry business model to make long-term changes in the chip industry.
• The company's focus is on improving its financial position and regaining market share in the server market.
• Intel plans to moderate investments in the foundry business to achieve profitability by mid-decade.

Intel's Technology Developments

• Intel's first server part for Intel 3 has begun production, marking a return to leadership process technology in the U.S. after a decade.
• The company is seeing growth in the data center CPU market and expects to stabilize and regain market share with higher core counts and improved power efficiency.
• Intel's accelerator product line is expected to become a compelling solution for enterprise customers in the second half of the year.
• The company leads the AI PC market and expects to exceed its target of shipping 40 million AI PCUs this year.

Intel's Global Presence and Challenges

• Intel is committed to supporting its teams in Israel despite the ongoing conflict and emphasizes the need for sustainable peace in the region.
• The company aims to build resilient supply chains worldwide to address challenges in Israel, Ukraine, and Asia.
• While acknowledging competitors' strength, Intel believes in the importance of choice and the role of CPUs in AI applications.

Cloud Computing and AI Adoption

• Alphabet's Google Cloud is experiencing growth and gaining market share, particularly among startups, due to its strong AI assets.
• The adoption of AI offerings is boosting productivity, with Microsoft Azure seeing increased usage among Fortune 100 companies.
• Corporate America is experimenting with generative AI, with some early adopters achieving scale.
• Companies like DataDog are expected to benefit from increased cloud consumption driven by AI adoption, although the impact may not be immediate and widespread.

Tech Earnings and Market Sentiment

• The overall sentiment from the first week of mega-cap tech earnings is cautiously optimistic, with a focus on companies where expectations are low.
• Valuations are reasonable, and companies have idiosyncratic drivers.
• Amazon is expected to show good results due to tech companies and startups experimenting with AI, but enterprise budgets remain constrained in the first half.

International News

• A food delivery service is launching its international platform in Riyadh, its first location outside China.
• US Secretary of State Antony Blinken and Chinese President Xi met, issuing a warning that China and the United States should be partners rather than rivals.
• Huawei's latest smartphones utilize an updated version of its made-in-China chips, alarming Washington officials due to their advanced technology.

Legal Issues and Cybersecurity

• The FTC alleges that Amazon executives, including Andy Jassy and Jeff Bezos, destroyed text messages discussing business, erasing evidence for an antitrust case.
• Amazon refutes the FTC's allegations, claiming that the agency already has a complete picture of decision-making with over 1.7 million documents and 100 terabytes of data.
• Darktrace, a UK-listed cybersecurity company, has agreed to sell itself to a private equity firm for $5.3 billion, a 20% premium.

Market Performance and Business Updates

• The Nasdaq 100 and Nasdaq are experiencing their best week since November, driven by macro data indicating in-line inflationary pressures and resilient dollar strength.
• Atlassian, an Australian software company, announced that its co-CEO is stepping down to spend more time with family and on philanthropy, causing some shareholder discontent.
• Darktrace, a UK-listed cybersecurity company, is close to securing $6 billion in funding.
• Elon Musk's new AI company, XAI, is raising funds to keep up with the expensive training costs of large language models.
• IBM is investing $730 million U.S. dollars in a semiconductor project in Canada, signaling a potential shift in domestic efforts for semiconductor production.
• Cybersecurity firm Rubrik had a successful IPO, raising $732 million, with Greylock Partners being one of the key backers.
• Lime, a shared electric bike and scooter company backed by Uber, plans to invest $55 million to expand its fleet globally.