Why Intel Stock was such a dog on Friday
What happened
Once the head of the pack in computer processors, Intelligence (NASDAQ: INTC) is the subject of serious attacks in its core business. Big rival tech companies choose to develop their own chips, the latest being powerful Microsoft (NASDAQ: MSFT). On Friday, on news that Microsoft was going it alone, Intel shares fell 6.3% on the day.
So what
In a big “uh-oh” for Intel, various media reported that Microsoft was developing proprietary chips to power the servers that underpin its massive cloud services. According to Bloomberg, he is also considering the development of different processors that would be the brains of his Surface line of tablet PCs.
Image source: Getty Images.
This closely follows news from last month that Apple (NASDAQ: AAPL) also becomes owner. Apple confirmed this when it officially unveiled its latest Mac lineup offerings, which will ultimately be powered by the company’s home brewing. M1 chips.
The two technology the giants remain closely linked to Intel. The company’s processors power a large number of PCs running Microsoft’s Windows operating system, so much so that these machines are often identified by the hybrid moniker of Wintel. And Intel’s chips have been at the heart of Apple’s computers for years, based on long-term agreements between the two companies.
Now what
Intel shareholders are right to be concerned; transformers are essential to the success of the business. Although he can probably resist Apple’s imminent departure, Microsoft is a powerful beast that could cause serious damage if it evolves with a proprietary chip.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.