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Intel (INTC) stock falls after the company's weaker-than-expected second quarter forecast overshadowed its first quarter earnings release.
CFRA Research senior equity analyst Angelo Zino tells Julie Hyman and Fundstrat Global Advisors managing director and global head of technical strategy Mark Newton that Intel won't be able to deliver what investors want in the next few years, if at all. Watch the video above to hear more from Zino on Intel's position following its earnings print.
Check out Market Domination Overtime's interview with Zino, alongside D.A. Davidson head of technology research Gil Luria, where the pair of analysts share their instant reaction to Alphabet's (GOOG, GOOGL) first quarter earnings here.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
I I want to turn to to Intel because there obviously is also a really fascinating story here. And Angelo, um we'll get you to dig into to Intel here for us. The company is confirming that it is cutting some jobs, removing management layers in the words of CEO. But what I keep coming back to is this is a company that still is just not delivering what investors want. When will it be able to do that?
I mean, I I think the quick answer is that not in the next two years, um, and and maybe never, right? So you kind of look at the company here, they've really kind of missed out on the AI boat. I mean, the world is completely changed over the last three years. They didn't have the right products out there. The emphasis was on manufacturing, it was on uh building um, you know, that that foundry uh initiative out there. And and not necessarily, you know, the end of the world or something that's not going to come to fruition. But when you kind of look at, you know, them kind of missing the boat on the AI side of things, it's going to be almost impossible for them to catch up here, given the competitive pressures out there, specifically in Nvidia. So, um, when you kind of look here, um, what they're essentially kind of caught now doing is continuing to lose market share in the the core data center side of things and probably also in the PC side of things as you've got new emerging competitors on that side of things. And ultimately, what they're going to have to continue to do is continue to right-size the cost uh the cost side of things, right? So you've sort you saw a 15% cost reduction last year, you you're going to see more cost reductions this year. And they really do need to at this point in time, if you're a, you need to focus on kind of getting to positive free cash flow. And that's going to mean doing a lot of um hard work on the cost side of things. And you know, right now street's looking at that happening in 2027, but you need you need to see that happen quicker.
Yeah, it seems like there's only so much they can do, right? They're cutting 20% of the workforce and and they're going to do all they can to cut costs, but if they've missed the AI boat, I mean, what steps can they do to participate and regain leadership again? I mean, it seems like the stock has been range bound for almost, you know, eight months now, right near $20. You know, what can they specifically do to change that in your view?
I mean, I think the hope is eventually you kind of uh build up some business on the foundry side of things, right? You're you're moving to 18A um here in the second half of the year into 2026. Trump is almost kind of giving you somewhat of a gift here by by essentially throwing tariffs on semiconductors at some point later this year. So the hope is they get some sort of momentum and um, you know, upside on the foundry side of things. And ultimately, the hope is you maybe you could spin off that foundry business, and then you can unlock the the potential growth, the margin side of things on the product side of things. But again, you need to have some of those right products here um be developed over the next 18 or 24 months.