By all means, Intel was on top of its game in the second quarter of 2012. The Santa Clara chip maker reported quarterly revenue of $13.5 billion, operating income of $3.8 billion, and net income of $2.8 billion. Talk all you want about the PC sales slump, Intel still performed well, with its PC Client Group pulling in $8.7 billion in revenue, up 3 percent sequentially, along with its Data Center Group adding another $2.8 billion (up 14 percent sequentially). If the numbers are so strong, why is Wall Street on edge?
It has to do with the fact that Intel cut its full-year revenue forecast. Intel projects revenue growth of 3-5 percent year-over-year, compared to the prior expectation of "high single-digit growth." According to Reuters , at least four brokerage firms lowered their price targets on Intel as a result.
There's also concern over Intel's inventory level, which rose roughly 9 percent sequentially in the second quarter. Intel is sitting on a mountain of Ivy Bridge processors, which could be hard to move if Windows 8, due out in October, fails to excite people into purchasing new PCs.
High price Ultrabooks also pose a problem for Intel, though during a conference call, company chief Paul Otellini stated that $699 Ultrabook models are headed to stores this fall.
"In a softer selling season, these devices become even more attractive," Otellini said.