Why did Intel stock sink today? Weak results, guidance cause multiple downgrades
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Intel (NASDAQ:INTC) shares sank nearly 9% on Friday after the chip giant reported a second-quarter quarter that Chief Executive Pat Gelsinger said was "below the standards we have set for the company and our shareholders," resulting in several Wall Street analysts downgrading the stock. 
Baird analyst Tristan Gerra downgraded Intel (INTC) shares to neutral from outperform and cut the price target to $40 from $60, noting that the company suffered from weakening consumer demand for PCs, something that is not likely to change anytime soon. 
Gerra noted that there would be no PC recovery in the "near term," noting a shift in consumer patterns, along with "weak first-half seasonality." Gerra also pointed out that delays in Sapphire Rapids and the rest of Intel's (INTC) product mix should benefit Advanced Micro Devices (AMD) in the server market in the second half of the year.
For the period ending July 2, Intel (INTC) said it earned an adjusted $0.29 per share on $15.3B in revenue, down 17% year-over-year. Data Center revenue fell 16% year-over-year, while the company's largest segment, Client Computing, accounted for $7.7B in sales, down 25% year-over-year.
Looking to the third quarter, Intel (INTC) said it sees revenues between $15B and $16B, far below the $18.67B analysts were expecting. Non-GAAP gross margins are expected to be 46.5%, with earnings per share of $0.35.
Santa Clara, California-based Intel (INTC) also cut its full-year outlook for sales to be between $65B and $68B, compared to a previous outlook of $76B. Analysts were expecting $74.76B for full-year revenue.
Susquehanna analyst Christopher Rolland downgraded Intel (INTC) to negative from neutral, noting that Intel (INTC) is facing several "long-term headwinds," including servers moving to Arm, as well as Arm taking more market share in PCs, with Apple (AAPL) expanding their M-series to "fully replace" Intel. 
Additionally, Advanced Micro Devices (AMD) is likely to keep gaining share in the PC market, albeit at a slower pace than in the past few years. And AMD's (AMD) server share is likely to accelerate with the launch of 5nm Genoa, expected to beat the aforementioned Sapphire Roads to market, something that may not happen until next year. 
Other risks to Intel (INTC) include the continued push-out of its product roadmap, with potential delays for Granite Rapids and Meteor Lake; gross margin pressure as the company spends to move to more complex geometries and competition gets greater; a "[work from home] hangover," leading to the PC market being smaller than believed; and a "growing mismatch" between earnings and free cash flow per share. 
"For decades, Intel was able to cover up a litany of failed projects, poor acquisitions, and strategic foibles by pushing Mooreâs Law and process leadership," Rolland wrote in a note to clients. "Unless they regain this leadership (we think unlikely), or change strategic direction, we expect growth, profitability, and cash flow problems to persist at Intel." 

On the earnings call, Intel's (INTC) Gelsinger said the company will lower its spending and expenses for the remainder of the year, citing ongoing economic weakness and a 10% decline in the PC market.