Too much product not enough buyers
Chipzilla could be in deep trouble as processor shipments slow, it faces rising competition and record capital expenditure levels, according to bean counters at Goldman Sachs. The analysts downgraded Intel and advised shareholders to sell them.
Goldman analysts, including James Covello and Simon Schafer, said that there would be a glut in processors thanks to the fact that plants had been expanded. While Wall Street is forecasting a six percent year-over-year rise in Intel's sales, amid expanding gross margins, Goldman said that sales will be flat because of the excess capacity.
Intel will also face problems dealing with improved products from AMD and tablets cannibalising notebooks Intel has not done well in the mobile business which has been earning lots of dosh for ARM. It is not clear how much Goldman's warning bothered Wall Street.
Shareprices in the outfit dropped six percent, but appear to have stablised again. It looks like investors think that Intel will do well, what ever Goldman said.