Not mentioned in the article but TSMC (company that actually manufactures the chips for everyone (except intel who manufacture their own designs)) has lost nearly 17% of it’s stock price over the past month, 7% in the last week.
All of these companies were being valued based on the assumption that the number of GPU data centers being built would increase as time went on. Essentially that the demand for the these various products would not just stay as high as it is, but keep getting higher.
This is just a bunch of analysts saying “ok, well, maybe the number of data centers being built will not increase drastically, and the demand for these products will stay the same”. The real blood bath comes if they start saying “there will be less datacenters constructed next year than there are currently under construction.”
The current shift in sentiment probably comes from the “disappointing” info from the companies that would be buying all the compute from the data-centers. Google missing ad revenue growth targets due to Gemini cannibalize search. Anthropic preparing to IPO and being forced to show less than stellar financials.
I suspect that this down turn is temporary and Valuations will rise angain and we will see another big crash before this hype cycle truly dies.
intel’s sales to datacenters and their foundry services (making other people’s chips) are larger than their sale of chips for PCs, has been for over a year now. Even a decade ago intel only made slightly more from PC sales than they did datacenters. They’ve been huge in the server world ever since Lin-tel systems devoured sun’s market share in the 2000s.