Intel CEO Pat Gelsinger speaks during the Mobileye Global Inc. IPO at the Nasdaq MarketSite in New York on Oct. 26, 2022. Mobileye Global Inc., the self-driving technology company owned by Intel Corp., priced one of the biggest US initial public offerings of the year above its marketed range to raise $861 million.
Michael Nagle | Bloomberg | Getty Images
Intel stock dropped 6% on Wednesday after the company gave investors an update on the company’s turnaround plan to become a chip manufacturing company competing with Taiwan Semiconductor Manufacturing Company.
Wednesday’s update featured Intel’s CFO, David Zinsner, explaining how the company would soon change the way it reports its financial results to give its foundry business, known as IFS, its own profit-and-loss statement, which would reveal the company’s manufacturing margins.
Intel’s new reporting structure could also help control costs at the chipmaker, which is seeking to trim as much as $10 billion from its costs over the next three years.
The update comes as investors continue to assess Intel’s turnaround plan under CEO Pat Gelsinger, which depends on catching up with TSMC’s manufacturing technology by 2026, a plan it calls “five nodes in four years.” Intel plans to use its own chips to work out problems in its manufacturing before opening up the factories to third-party companies.
If Intel catches up with TSMC, then it can compete for contracts to build high-performance chips from companies like Apple, Nvidia, and Qualcomm, which don’t run their own manufacturing and currently often opt for TSMC or Samsung manufacturing. Intel said it expected to announce a key customer for its foundry business later this year.
“The manufacturing group will now face the same market dynamics as their foundry counterparts,” Zinsner told analysts. “They’ll need to compete for volume through performance and price as internal customers will have the option to leverage third party foundries and to attract external foundry volume, they must do the same.”
Wednesday’s update was focused on how Intel would use its manufacturing capabilities for its own chips. It said more updates on the foundry business and third-party customers would come later this year. It said its own chip needs would contribute $20 billion in revenue to the unit next year.
Analysts on the call worried about Intel’s gross margins and asked how this plan would increase them. In April, Intel said its gross margin for the first quarter was 38.4%, down 51.3% in a year. Intel management said on Wednesday it was shooting for 60% margins.
“We think we have a good path to 60 [percent],” Zinsner said.
Separately, Intel said on Wednesday that it planned to sell 20% of an Austrian subsidiary, IMS Nanofabrication, to private equity firm Bain Capital in a deal that valued the unit at $4.3 billion.
“This will turn out to be one of the best acquisitions we’ve ever made, given that level of valuation and investment made,” Zinsner said on Wednesday.
Other chip stocks also fell on Wednesday amid a down day for tech stocks. AMD, Intel’s chief rival, fell nearly 6%, while Qualcomm fell over 3%. Nvidia, which has been boosted by the recent AI wave, fell less than 2%.
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
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Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.
Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”
The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.