Intel’s data center business missed the mark

Although Intel’s data center business grew the most in all its business verticals, but despite that it missed the Wall Street targets. Sales to data centers that power mobile and web apps, which bring more profit than chips for personal computers, rose 26.9 percent to $5.55 billion in the second quarter ended June 30. Analysts had expected revenue of $5.63 billion, according to financial and data analytics firm FactSet.The chip maker has been increasingly catering to data centers as revenue from PCs has flattened since shipments peaked in 2011. With competition from AMD is getting stiff and once again delaying the release of its next-generation chips until the end of 2019 is putting pressure on its stock valuations. Moreover AMD has been gaining ground with its new server chips, beat estimates for quarterly profit and revenue, saw Intel’s shares falling by almost 5 percent.

“We believe performance within Intel’s data center business largely dictates the performance in the shares and view the slight miss versus consensus as a negative,” said CFRA Research analyst Angelo Zino.


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