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Intel shares plummet on news of Microsoft’s development of its own processors
News of Microsoft’s in-house development of its own ARM-based central processors plunges stocks in x86 chip makers. Intel has suffered especially seriously, which, as it now seems, in the future may lose one more strategic client.
Microsoft is building an ARM-based server processor, which it plans to deploy in datacenters running Azure services, according to a Bloomberg posting. Currently, the company’s servers are built on Intel Xeon processors. In addition, the original message also talks about another promising Microsoft project — an ARM processor for mobile devices of the Surface family.
If Microsoft projects to create its own chips are crowned with success, this will mean another narrowing of the sales market for the products of manufacturers of x86-processors, primarily Intel. This looks like a very disturbing sign, especially against the background of the fact that other tech giants are gradually leaning towards ARM processors. For example, Amazon has been developing in this direction for a long time and quite successfully, and Apple recently even introduced MacBook Air and MacBook Pro laptops built on processors with ARM architecture, and outlined a plan to completely abandon Intel chips within the next couple of years.
The stock market inevitably reacted to the possibility of radical changes in the processor market. Intel shares immediately fell 6.3%, falling to $ 47.46. AMD shares, which may be indirectly affected by Microsoft’s transition to its own processors, lost 1% in price, falling to $ 95.95.
Let us remind you that this year is not going very well for Intel’s business. The company faced problems with the implementation of modern technological processes and repeatedly postponed the release of new products, primarily for the server market. All this has led to the fact that since the beginning of 2021 its capitalization has decreased by more than 20%.