September 3, 2004

IT Investor's Journal: Did Intel 'accidentally' make too many CPUs this quarter?

Author: Melanie Hollands

From an inventory perspective, Intel's mid-quarter update Thursday evening was interesting. Intel's guidance last quarter was somewhat aggressive, but heading into the call last night this was my thesis. I thought third- and fourth-quarter demand was actually going to be better than a lot of people thought (NPD data is positive; Taiwan notebook numbers are positive). However, I believed the key on the call would be if management pushed out guidance at lower ASPs on and took the margin hit. Since the market sentiment was so negative on INTC stock, I was almost tempted to go the other way because it was so crowded with negative thoughts. But if I took the contrarian play, I wasn't thinking of buying the stock; INTC calls would have been interesting way to play it on the contrarian side.
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