Surprisingly, Apple (-1.66%), which only sells client products, was nearly unaffected by the performance of Intel's client computing group, as investors probably believe that the world's largest supplier of consumer electronics is more immune to memory prices than Intel. Ironically, if we count the A-series SoCs used in iPhones (which tend to outperform mainstream laptop CPUs), Apple sells substantially more processors than Intel, making Apple by far the world's largest supplier of microprocessors. Despite this, Apple's shares were largely unaffected by the semiconductor selloff.
There are several reasons for this distinction. Firstly, Apple's business model is fundamentally different. Intel sells processors to PC manufacturers, whereas Apple designs its own processors and sells them as part of finished products. Consequently, Apple captures revenue from the entire device rather than just the processor. Secondly, the two companies face different demand dynamics. Intel depends heavily on the PC market, while Apple's iPhone business follows the smartphone replacement cycle. Rising memory prices could affect both, but not necessarily to the same extent and at the same time.
There is an additional irony: Apple is also a major customer of TSMC, so its processor supply chain overlaps with those of AMD, Intel, and other semiconductor companies whose shares declined sharply.
While we should not directly compare Apple and Intel, the comparison illustrates that investors were not necessarily abandoning companies that design or use semiconductors, but were rather concerned about the profitability and growth prospects of these high-tech companies. And if we take a look at the situation from this point of view, the whole thing will start looking completely different.
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Anton Shilov Social Links Navigation Contributing Writer Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
Lieutenant Barclay I hope it gets worse. I want the greedy investors jumping out of high-rise windows. Reply
hotaru251 this is what happens when you have overinflated valuations…. is it gonna pop? not soon but man the wait is killing me as I want market to realize how bad over inflating is for even traders long term. Reply
derekullo Lieutenant Barclay said: I hope it gets worse. I want the greedy investors jumping out of high-rise windows. Down markets are actually the best times for investors for deploying saved funds. Nobody wants to buy a stock or etf with a historically high P/E ratio. What you are saying in essence is you want the poor and middle class to struggle even more while the investors dial back their vacation from Hawaii to Key West … I type this on a vacation in Key West unaware that the market would fall during my vacation lol. Reply
Jeremy Kaplan Lieutenant Barclay said: I hope it gets worse. I want the greedy investors jumping out of high-rise windows. Well that's a little extreme. But yeesh, it really seems clear that there's an AI fueled bubble. I just hope it doesn't crush my 401k Reply
JamesJones44 People got over exuberant about what Intel was going to be able to do in the GenAI processor/SoC space. The quarter and guide themselves were actually not bad, but the world of GenAI hopes and dreams it wasn't enough to satisfy them. AMD is in a similar boat, the whisper numbers out there have them near 20 billion in revenue for this quarter. Seems extremely unlikely to me as it would be 53% more than the guide from AMD, but when the bubble is inflating, people get crazy ideas in their head. Reply
palladin9479 To quote ambassador Kosh, "and so it begins". Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/cpus/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/cpus/intels-woes-wipe-out-usd1-trillion-of-semiconductor-market-cap-in-one-day-pc-market-bloodbath-leaves-few-chip-stocks-unscathed#main
- https://www.tomshardware.com/membership
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- Anthropic's Claude AI blocks video game cloning and reverse-engineering
- Modder uses a trash 4-kW air conditioner radiator for his test bench to see how well it can cool a PC
- Grab a new 3D printer this Halloween weekend, with prices as low as $199
- Score a huge $1,250 saving on this Alienware gaming PC with an RTX 5070 Ti and 32GB DDR5 right now
Informational only. No financial advice. Do your own research.