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  • Layoffs are piling up, raising worker anxiety. Here are some companies that have cut jobs recently

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    NEW YORK (AP) — It’s a tough time to be looking for a job.

    Amid wider economic uncertainty, some analysts have said that businesses are at a “no-hire, no fire” standstill. That’s caused many to limit new work to only a few specific roles, if not pause openings entirely. At the same time, sizable layoffs have continued to pile up — raising worker anxieties across sectors.

    Some companies have pointed to rising operational costs spanning from President Donald Trump’s barrage of new tariffs and shifts in consumer spending. Others cite corporate restructuring more broadly — or, as seen with big names like Amazon, are redirecting money to artificial intelligence.

    Federal employees have encountered additional doses of uncertainty, impacting worker sentiment around the job market overall. Shortly after Trump returned to office at the start of the year, federal jobs were cut by the thousands. And the record 43-day government shutdown also left many to work without paychecks.

    The impasse put key economic data on hold, too. In a delayed report released Thursday, the Labor Department said U.S. employers added a surprising 119,000 jobs in September. But unemployment rose to 4.4% — and other troubling details emerged, including revisions showing the economy actually lost 4,000 jobs in August. There’s also growing gender and racial disparities. The National Women’s Law Center notes women only accounted for 21,000 of September’s added jobs — and that Black women over the age of 20, in particular, saw unemployment climb to 7.5% for the month.

    The shutdown has left holes in more recent hiring numbers. The government says it won’t release a full jobs report for October.

    Here are some of the largest job cuts announced recently:

    Verizon

    In November, Verizon began laying off more than 13,000 employees. In a staff memo announcing the cuts, CEO Dan Schulman said that the telecommunications giant needed to simplify operations and “reorient” the entire company.

    General Motors

    General Motors moved to lay off about 1,700 workers across manufacturing sites in Michigan and Ohio in late October, as the auto giant adjusts to slowing demand for electric vehicles. Hundreds of additional employees are reportedly slated for “temporary layoffs” at the start of next year.

    Paramount

    In long-awaited cuts just months after completing its $8 billion merger with Skydance, Paramount plans to lay off about 2,000 employees — about 10% of its workforce. Paramount initiated roughly 1,000 of those layoffs in late October, according to a source familiar with the matter.

    In November, Paramount also announced plans to eliminate 1,600 positions as part of divestitures of Televisión Federal in Argentina and Chilevision in Chile. And the company said another 600 employees had chosen voluntary severance packages as part of a coming push to return to the office full-time.

    Amazon

    Amazon said last month that it will cut about 14,000 corporate jobs, close to 4% of its workforce, as the online retail giant ramps up spending on AI while trimming costs elsewhere. A letter to employees said most workers would be given 90 days to look for a new position internally.

    UPS

    United Parcel Service has disclosed about 48,000 job cuts this year as part of turnaround efforts, which arrive amid wider shifts in the company’s shipping outputs. UPS also closed daily operations at 93 leased and owned buildings during the first nine months of this year.

    Target

    Target in October moved to eliminate about 1,800 corporate positions, or about 8% of its corporate workforce globally. The retailer said the cuts were part of wider streamlining efforts.

    Nestlé

    In mid-October, Nestlé said it would be cutting 16,000 jobs globally — as part of wider cost cutting aimed at reviving its financial performance amid headwinds like rising commodity costs and U.S. imposed tariffs. The Swiss food giant said the layoffs would take place over the next two years.

    Lufthansa Group

    In September, Lufthansa Group said it would shed 4,000 jobs by 2030 — pointing to the adoption of artificial intelligence, digitalization and consolidating work among member airlines.

    Novo Nordisk

    Also in September, Danish pharmaceutical company Novo Nordisk said it would cut 9,000 jobs, about 11% of its workforce. The company — which makes drugs like Ozempic and Wegovy — said the layoffs were part of wider restructuring, as it works to sell more obesity and diabetes medications amid rising competition.

    ConocoPhillips

    Oil giant ConocoPhillips announced plans in September to lay off up to a quarter of its workforce, as part of broader efforts from the company to cut costs. Between 2,600 and 3,250 workers were expected to be impacted, with most layoffs set to take place before the end of 2025.

    Intel

    Intel has moved to shed thousands of jobs — with the struggling chipmaker working to revive its business. In July, CEO Lip-Bu Tan said Intel expected to end the year with 75,000 “core” workers, excluding subsidiaries, through layoffs and attrition. That’s down from 99,500 core employees reported the end of last year. The company previously announced a 15% workforce reduction.

    Microsoft

    In May, Microsoft began laying off about 6,000 workers across its workforce. And just months later, the tech giant said it would be cutting 9,000 positions — marking its biggest round of layoffs seen in more than two years. The company has cited “organizational changes,” but the labor reductions also arrive as the company spends heavily on AI.

    Procter & Gamble

    In June, Procter & Gamble said it would cut up to 7,000 jobs over the next two years, 6% of the company’s global workforce. The maker of Tide detergent and Pampers diapers said the cuts were part of a wider restructuring — also arriving amid tariff pressures.

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  • China rolls out its version of the H-1B visa to attract foreign tech workers

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    HONG KONG (AP) — Vaishnavi Srinivasagopalan, a skilled Indian IT professional who has worked in both India and the U.S., has been looking for work in China. Beijing’s new K-visa program targeting science and technology workers could turn that dream into a reality.

    The K-visa rolled out by Beijing last month is part of China’s widening effort to catch up with the U.S. in the race for global talent and cutting edge technology. It coincides with uncertainties over the U.S.’s H-1B program under tightened immigrations policies implemented by President Donald Trump.

    “(The) K-visa for China (is) an equivalent to the H-1B for the U.S.,” said Srinivasagopalan, who is intrigued by China’s working environment and culture after her father worked at a Chinese university a few years back. “It is a good option for people like me to work abroad.”

    The K-visa supplements China’s existing visa schemes including the R-visa for foreign professionals, but with loosened requirements, such as not requiring an applicant to have a job offer before applying.

    Stricter U.S. policies toward foreign students and scholars under Trump, including the raising of fees for the H-1B visa for foreign skilled workers to $100,000 for new applicants, are leading some non-American professionals and students to consider going elsewhere.

    “Students studying in the U.S. hoped for an (H-1B) visa, but currently this is an issue,” said Bikash Kali Das, an Indian masters student of international relations at Sichuan University in China.

    China wants more foreign tech professionals

    China is striking while the iron is hot.

    The ruling Communist Party has made global leadership in advanced technologies a top priority, paying massive government subsidies to support research and development of areas such as artificial intelligence, semiconductors and robotics.

    “Beijing perceives the tightening of immigration policies in the U.S. as an opportunity to position itself globally as welcoming foreign talent and investment more broadly,” said Barbara Kelemen, associate director and head of Asia at security intelligence firm Dragonfly.

    Unemployment among Chinese graduates remains high, and competition is intense for jobs in scientific and technical fields. But there is a skills gap China’s leadership is eager to fill. For decades, China has been losing top talent to developed countries as many stayed and worked in the U.S. and Europe after they finished studies there.

    The brain drain has not fully reversed.

    Many Chinese parents still see Western education as advanced and are eager to send their children abroad, said Alfred Wu, an associate professor at the National University of Singapore.

    Still, in recent years, a growing number of professionals including AI experts, scientists and engineers have moved to China from the U.S., including Chinese-Americans. Fei Su, a chip architect at Intel, and Ming Zhou, a leading engineer at U.S.-based software firm Altair, were among those who have taken teaching jobs in China this year.

    Many skilled workers in India and Southeast Asia have already expressed interest about the K-visa, said Edward Hu, a Shanghai-based immigration director at the consultancy Newland Chase.

    Questions about extra competition from foreign workers

    With the jobless rate for Chinese aged 16-24 excluding students at nearly 18%, the campaign to attract more foreign professionals is raising questions.

    “The current job market is already under fierce competition,” said Zhou Xinying, a 24-year-old postgraduate student in behavioral science at eastern China’s Zhejiang University.

    While foreign professionals could help “bring about new technologies” and different international perspectives, Zhou said, “some Chinese young job seekers may feel pressure due to the introduction of the K-visa policy.”

    Kyle Huang, a 26-year-old software engineer based in the southern city of Guangzhou, said his peers in the science and technology fields fear the new visa scheme “might threaten local job opportunities”.

    A recent commentary published by a state-backed news outlet, the Shanghai Observer, downplayed such concerns, saying that bringing in such foreign professionals will benefit the economy. As China advances in areas such as AI and cutting-edge semiconductors, there is a “gap and mismatch” between qualified jobseekers and the demand for skilled workers, it said.

    “The more complex the global environment, the more China will open its arms,” it said.

    “Beijing will need to emphasize how select foreign talent can create, not take, local jobs,” said Michael Feller, chief strategist at consultancy Geopolitical Strategy. “But even Washington has shown that this is politically a hard argument to make, despite decades of evidence.”

    China’s disadvantages even with the new visas

    Recruitment and immigration specialists say foreign workers face various hurdles in China. One is the language barrier. The ruling Communist Party’s internet censorship, known as the “Great Firewall,” is another drawback.

    A country of about 1.4 billion, China had only an estimated 711,000 foreign workers residing in the country as of 2023.

    The U.S. still leads in research and has the advantage of using English widely. There’s also still a relatively clearer pathway to residency for many, said David Stepat, country director for Singapore at the consultancy Dezan Shira & Associates.

    Nikhil Swaminathan, an Indian H1-B visa holder working for a U.S. non-profit organization after finishing graduate school there, is interested in China’s K-visa but skeptical. “I would’ve considered it. China’s a great place to work in tech, if not for the difficult relationship between India and China,” he said.

    Given a choice, many jobseekers still are likely to aim for jobs in leading global companies outside China.

    “The U.S. is probably more at risk of losing would-be H-1B applicants to other Western economies, including the UK and European Union, than to China,” said Feller at Geopolitical Strategy.

    “The U.S. may be sabotaging itself, but it’s doing so from a far more competitive position in terms of its attractiveness to talent,” Feller said. “China will need to do far more than offer convenient visa pathways to attract the best.”

    ___

    AP writer Fu Ting in Washington and researchers Yu Bing and Shihuan Chen in Beijing contributed.

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  • Layoffs are piling up, raising worker anxiety. Here are some companies that have cut jobs recently

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    NEW YORK (AP) — It’s a tough time for the job market.

    Amid wider economic uncertainty, some analysts have said that businesses are at a “no-hire, no fire” standstill. That’s caused many to limit new work to only a few specific roles, if not pause openings entirely. At the same time, some sizeable layoffs have continued to pile up — raising worker anxieties across sectors.

    Some companies have pointed to rising operational costs spanning from President Donald Trump’s barrage of new tariffs and shifts in consumer spending. Others cite corporate restructuring more broadly — or, as seen with big names like Amazon, are redirecting money to artificial intelligence.

    Federal employees have encountered additional doses of uncertainty, impacting worker sentiment around the job market overall. Shortly after Trump returned to office at the start of the year, federal jobs were cut by the thousands. And many workers are now going without pay as the U.S. government shutdown nears its fourth week.

    “A lot of people are looking around, scanning the job environment, scanning the opportunities that are available to them — whether it’s in the public or private sector,” said Jason Schloetzer, professor business administration at Georgetown University’s McDonough School. “And I think there’s a question mark around the long-term stability everywhere.”

    Government hiring data is on hold during the shutdown, but earlier this month a survey by payroll company ADP showed that the private sector lost 32,000 jobs in September.

    Here are some companies that have moved to cut jobs recently.

    General Motors

    General Motors moved to lay off about 1,700 workers across manufacturing sites in Michigan and Ohio on Wednesday, as the auto giant adjusts to slowing demand for electric vehicles.

    Hundreds of additional employees are reportedly slated for “temporary layoffs.” And GM has recently moved to downsize other parts of its workforce, too — including 200 layoffs mostly impacting engineers in Detroit, and other 300 job cuts at a Georgia IT Innovation Center, which it is also shuttering.

    Paramount

    In long-awaited cuts just months after completing its $8 billion merger with Skydance, Paramount is going to lay off about 2,000 employees — about 10% of its workforce.

    Paramount initiated roughly 1,000 of those layoffs on Wednesday, according to a source familiar with the matter, who spoke on the condition of anonymity. The rest of the cuts will be made at a later date.

    Amazon

    Amazon will cut about 14,000 corporate jobs as the online retail giant ramps up spending on artificial intelligence.

    Amazon said Tuesday that it will cut about 14,000 corporate jobs, close to 4% of its workforce, as the online retail giant ramps up spending on AI while trimming costs elsewhere. A letter to employees said most workers would be given 90 days to look for a new position internally.

    CEO Andy Jassy previously said he anticipated generative AI would reduce Amazon’s corporate workforce in the coming years. And he has worked to aggressively cut costs overall since 2021.

    UPS

    United Parcel Service has disclosed about 48,000 job cuts this year as part of turnaround efforts, which arrive amid wider shifts in the company’s shipping outputs.

    In a Tuesday regulatory filing, UPS said it’s cut about 34,000 operational positions — and the company announced another 14,000 role reductions, mostly within management. Combined, that’s much higher than the roughly 20,000 cuts UPS forecast earlier this year.

    Target

    Last week, Target that it would eliminate about 1,800 corporate positions, or about 8% of its corporate workforce globally.

    Target said the cuts were part of wider streamlining efforts — with Chief Operating Officer Michael Fiddelke noting that “too many layers and overlapping work have slowed decisions.” The retailer is also looking to rebuild its customer base. Target reported flat or declining comparable sales in nine of the past eleven quarters.

    Nestlé

    In mid-October, Nestlé said it would be cutting 16,000 jobs globally — as part of wider cost cutting aimed at reviving its financial performance.

    The Swiss food giant said the layoffs would take place over the next two years. The cuts arrive as Nestlé and others face headwinds like rising commodity costs and U.S. imposed tariffs. The company announced price hikes over the summer to offset higher coffee and cocoa costs.

    Lufthansa Group

    In September, Lufthansa Group said it would shed 4,000 jobs by 2030 — pointing to the adoption of artificial intelligence, digitalization and consolidating work among member airlines.

    Most of the lost jobs would be in Germany, and the focus would be on administrative rather than operational roles, the company said. The layoff plans arrived even as the company reported strong demand for air travel and predicted stronger profits in years ahead.

    Novo Nordisk

    Also in September, Danish pharmaceutical company Novo Nordisk said it would cut 9,000 jobs, about 11% of its workforce.

    Novo Nordisk — which makes drugs like Ozempic and Wegovy — said the layoffs were part of wider restructuring as the company works to sell more obesity and diabetes medications amid rising competition.

    ConocoPhillips

    Oil giant ConocoPhillips has said it plans to lay off up to a quarter of its workforce, as part of broader efforts from the company to cut costs.

    A spokesperson for ConocoPhillips confirmed the layoffs on Sept. 3, noting that 20% to 25% of the company’s employees and contractors would be impacted worldwide. At the time, ConocoPhillips had a total headcount of about 13,000 — or between 2,600 and 3,250 workers. Most reductions were expected to take place before the end of 2025.

    Intel

    Intel has moved to shed thousands of jobs — with the struggling chipmaker working to revive its business as it lags behind rivals like Nvidia and Advanced Micro Devices.

    In a July memo to employees, CEO Lip-Bu Tan said Intel expected to end the year with 75,000 “core” workers, excluding subsidiaries, through layoffs and attrition. That’s down from 99,500 core employees reported the end of last year. The company previously announced a 15% workforce reduction.

    Microsoft

    In May, Microsoft began began laying off about 6,000 workers across its workforce. And just months later, the tech giant said it would be cutting 9,000 positions — marking its biggest round of layoffs seen in more than two years.

    The latest job cuts hit Microsoft’s Xbox video game business and other divisions. The company has cited “organizational changes,” with many executives characterizing the layoffs as part of a push to trim management layers. But the labor reductions also arrive as the company spends heavily on AI.

    Procter & Gamble

    In June, Procter & Gamble said it would cut up to 7,000 jobs over the next two years, 6% of the company’s global workforce.

    The maker of Tide detergent and Pampers diapers said the cuts were part of a wider restructuring — also arriving amid tariff pressures. In July, P&G said it would hike prices on about a quarter of its products due to the newly-imposed import taxes, although it’s since said it expects to take less of a hit than previously anticipated for the 2026 fiscal year.

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  • Analyst Says Intel (INTC) Doesn’t Have AI Strategy ‘As Visible’ As Top Rivals

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    We recently published 10 Trending Stocks Moving These Days. Intel Corp (NASDAQ:INTC) is one of the trending stocks moving these days.

    Ben Reitzes, Melius Research’s head of technology research, said in a recent program on CNBC that while he likes Intel’s leadership, he cannot recommend the stock. Here is what the analyst said:

     

    “Lip-Bu Tan—we’re big fans. We’ve known him before, and he’s somebody people like and people want to work with. Give him a chance. There’s some speculation around him even working with AMD because we know he’s tight with Lisa Su, who’s a great CEO in her own right. Intel Corp (NASDAQ:INTC)—we’re watching. We’ve seen this surge here. It might take a rest for a little while because I don’t think the numbers are there near term. But with the backing of the US government, which I think was a really nice move by the Trump administration, you can’t count them out. You can’t count them out, but they really don’t have an AI strategy that’s as visible as the others that we recommend.”

    Ben Reitzes said he’s recommending Nvidia, Broadcom and AMD.

    Photo by Ishant Mishra on Unsplash

    While we acknowledge the potential of INTC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

    READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

    Disclosure: None. This article is originally published at Insider Monkey.

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  • Wall Street soars on hopes for lower interest rates as the Dow surges 846 points to a record

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    NEW YORK (AP) — Wall Street rallied to its best day in months on Friday after the head of the Federal Reserve hinted that cuts to interest rates may be on the way, along with the kick they can give the economy and investment prices.

    The S&P 500 leaped 1.5% for its first gain in six days and finished just shy of its all-time high set last week.

    The Dow Jones Industrial Average soared 846 points, or 1.9%, to its own record after topping its prior high from December. The Nasdaq composite jumped 1.9%.

    “Ka-Powell” is how Brian Jacobsen, chief economist at Annex Wealth Management, described the reaction to Jerome Powell’s highly anticipated speech in Jackson Hole, Wyoming. “The Fed isn’t going to be the party-pooper.”

    The hope among investors had been that Powell would hint that the Fed’s first cut to interest rates of the year may be imminent. Wall Street loves lower rates because they can goose the economy, even if they risk worsening inflation at the same time.

    President Donald Trump has angrily been calling for lower rates, often insulting Powell while doing so. And a surprisingly weak report on job growth this month pushed many on Wall Street to assume cuts may come as soon as the Fed’s next meeting in September.

    Powell encouraged them on Friday after saying he’s seen risks rise for the job market. The Fed’s two jobs are to keep the job market healthy and to keep a lid on inflation, and it often has to prioritize one over the other because it has just one tool to fix either.

    But Powell also would not commit to any kind of timing. He said the job market looks OK at the moment, even if “it is a curious kind of balance” where fewer new workers are chasing after fewer new jobs. Inflation, meanwhile, still has the potential to push higher because of Trump’s tariffs.

    In sum, Powell said that “the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance.”

    Treasury yields tumbled in the bond market as bets built that the Fed would cut its main interest rate in September. Traders see an 83% chance of that, up from 75% a day earlier, according to data from CME Group.

    The yield on the 10-year Treasury fell to 4.25% from 4.33% late Thursday. The two-year Treasury yield, which more closely tracks expectations for Fed action, sank to 3.69% from 3.79% in a notable move for the bond market.

    On Wall Street, stocks of smaller companies led the way. They can benefit more from lower interest rates because of their need to borrow money to grow. The smaller stocks in the Russell 2000 index surged 3.9% for its best day since April and more than doubled the S&P 500’s rally.

    Homebuilders jumped on hopes that easier interest rates could encourage more people to buy homes. Lennar, PulteGroup and D.R. Horton all rose more than 5%.

    Travel companies, meanwhile, climbed amid hopes that easier interest rates could help U.S. households spend more. Norwegian Cruise Line rallied 7.2%, Delta Air Lines flew 6.7% higher and Caesars Entertainment rose 7%.

    Shares of Nio, a Chinese electric-vehicle maker, that trade in the United States leaped 14.4% after it began pre-sales of its flagship premium SUV model, the ES8.

    Intel climbed 5.5% after Trump said the chip company has agreed to give the U.S. government a 10% stake in its business.

    Nvidia rose 1.7% to trim its loss for the week. The company, whose chips are powering much of the world’s move in to artificial-intelligence technology, had seen its stock struggle recently amid criticism that it and other AI superstars shot too high, too fast and became too expensive.

    Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. The chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia’s top semiconductors today, which cannot be sold to China due to U.S. national security restrictions.

    All told, the S&P 500 jumped 96.74 points to 6,466.91. The Dow Jones Industrial Average leaped 846.24 to 45,631.74, and the Nasdaq composite rallied 396.22 to 21,496.53.

    In stock markets abroad, Germany’s DAX returned 0.3% after government data showed that its economy shrank by 0.3% in the second quarter compared with the previous three-month period.

    Indexes rose across much of Asia, with stocks climbing 1.4% in Shanghai and 0.9% in South Korea.

    ___

    AP Writers Teresa Cerojano and Matt Ott contributed.

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  • Trump thinks owning a piece of Intel would be a good deal for the US. Here’s what to know

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    SAN FRANCISCO (AP) — President Donald Trump wants the U.S. government to own a piece of Intel, less than two weeks after demanding the Silicon Valley pioneer dump the CEO that was hired to turn around the slumping chipmaker. If the goal is realized, the investment would deepen the Trump administration’s involvement in the computer industry as the president ramps up the pressure for more U.S. companies to manufacture products domestically instead of relying on overseas suppliers.

    What’s happening?

    The Trump administration is in talks to secure a 10% stake in Intel in exchange for converting government grants that were pledged to Intel under President Joe Biden. If the deal is completed, the U.S. government would become one of Intel’s largest shareholders and blur the traditional lines separating the public sector and private sector in a country that remains the world’s largest economy.

    Why would Trump do this?

    In his second term, Trump has been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are helping to power the craze around artificial intelligence, to pay a 15% commission on their sales of chips in China in exchange for export licenses.

    Trump’s interest in Intel is also being driven by his desire to boost chip production in the U.S., which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country’s dependence on chips manufactured overseas, the president believes the U.S. will be better positioned to maintain its technological lead on China in the race to create artificial intelligence.

    Didn’t Trump want Intel’s CEO to quit?

    That’s what the president said August 7 in an unequivocal post calling for Intel CEO Lip-Bu Tan to resign less than five months after the Santa Clara, California, company hired him. The demand was triggered by reports raising national security concerns about Tan’s past investments in Chinese tech companies while he was a venture capitalist. But Trump backed off after Tan professed his allegiance to the U.S. in a public letter to Intel employees and went to the White House to meet with the president, who applauded the Intel CEO for having an “amazing story.”

    Why would Intel do a deal?

    The company isn’t commenting about the possibility of the U.S. government becoming a major shareholder, but Intel may have little choice because it is currently dealing from a position of weakness. After enjoying decades of growth while its processors powered the personal computer boom, the company fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone’s 2007 debut.

    Intel has fallen even farther behind in recent years during an artificial intelligence craze that has been a boon for Nvidia and AMD. The company lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, prompting Tan to undertake a cost-cutting spree. By the end of this year, Tan expects Intel to have about 75,000 workers, a 25% reduction from the end of last year.

    Would this deal be unusual?

    Although rare, it’s not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM.

    Would the government run Intel?

    U.S. Commerce Secretary Howard Lutnick told CNBC during a Tuesday interview that the government has no intention of meddling in Intel’s business, and will have its hands tied by holding non-voting shares in the company. But some analysts wonder if the Trump administration’s financial ties to Intel might prod more companies looking to curry favor with the president to increase their orders for the company’s chips.

    What government grants does Intel receive?

    Intel was among the biggest beneficiaries of the Biden administration’s CHIPS and Science Act, but it hasn’t been able to revive its fortunes while falling behind on construction projects spawned by the program.

    The company has received about $2.2 billion of the $7.8 billion pledged under the incentives program — money that Lutnick derided as a “giveaway” that would better serve U.S. taxpayers if it’s turned into Intel stock. “We think America should get the benefit of the bargain,” Lutnick told CNBC. “It’s obvious that it’s the right move to make.”

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  • CEO pay rose nearly 10% in 2024 as stock prices and profits soared

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    NEW YORK (AP) — The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10% in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply.

    Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can’t cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits.

    The Associated Press’ CEO compensation survey, which uses data analyzed for The AP by Equilar, included pay data for 344 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30.

    Here are the key takeaways from the survey:

    A good year at the top

    The median pay package for CEOs rose to $17.1 million, up 9.7%. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7% increase year over year.

    CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds: Consumers kept spending despite their misgivings about the economy; inflation did subside somewhat; the Fed lowered interest rates; and the job market stayed strong.

    The stock market’s main benchmark, the S&P 500, rose more than 23% last year. Profits for companies in the index rose more than 9%.

    “2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,” said Dan Laddin, a partner at Compensation Advisory Partners.

    Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, said there have been some recent “long-overdue” increases in worker pay, especially for those at the bottom of the wage scale. But she said too many workers in the world’s richest countries still struggle to pay their bills.

    The top earners

    Rick Smith, the founder and CEO of Axon Enterprises, topped the survey with a pay package valued at $164.5 million. Axon, which makes Taser stun guns and body cameras, saw revenue grow more than 30% for three straight years and posted record annual net income of $377 million in 2024. Axon’s shares more than doubled last year after rising more than 50% in 2023.

    General Electric Co. CEO Lawrence Culp Jr. signs a $52 billion deal by Emirates to purchase Boeing aircraft with GE engines, at the Dubai Air Show, in Dubai, United Arab Emirates, Monday, Nov. 13, 2023. (AP Photo/Lujain Jo)

    Almost all of Smith’s pay package consists of stock awards, which he can only receive if the company meets targets tied to its stock price and operations for the period from 2024 to 2030. Companies are required to assign a value to the stock awards when they are granted.

    Other top earners in the survey include Lawrence Culp, CEO of what is now GE Aerospace ($87.4 million), Tim Cook at Apple ($74.6 million), David Gitlin at Carrier Global ($65.6 million) and Ted Sarandos at Netflix ($61.9 million). The bulk of those pay packages consisted of stock or options awards.

    The median stock award rose almost 15% last year compared to a 4% increase in base salaries, according to Equilar.

    Tim Cook attends the WSJ. Magazine Innovators Awards at the Museum of Modern Art on Tuesday, Oct. 29, 2024, in New York. (Photo by Evan Agostini/Invision/AP, File)

    Tim Cook attends the WSJ. Magazine Innovators Awards at the Museum of Modern Art on Tuesday, Oct. 29, 2024, in New York. (Photo by Evan Agostini/Invision/AP, File)

    “For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses,” said Melissa Burek, also a partner at Compensation Advisory Partners. “Given the significant role that long-term incentives play in executive pay, this trend makes sense.”

    Jackie Cook at Morningstar Sustainalytics said the benefit of tying CEO pay to performance is “that share-based pay appears to provide a clear market signal that most shareholders care about.” But she notes that the greater use of share-based pay has led to a “phenomenal rise” in CEO compensation “tracking recent years’ market performance,” which has “widened the pay gap within workplaces.”

    Some well-known billionaire CEOs are low in the AP survey. Warren Buffett’s compensation was valued at $405,000, about five times what a worker at Berkshire Hathaway makes. According to Tesla’s proxy, Elon Musk received no compensation for 2024, but in 2018 he was awarded a multiyear package that has been valued at $56 billion and is the subject of a court battle.

    Other notable CEOs didn’t meet the criteria for inclusion the survey. Starbucks’ Brian Niccol received a pay package valued at $95.8 million, but he only took over as CEO on Sept. 9. Nvidia’s Jensen Huang saw his compensation grow to $49.9 million, but the company filed its proxy after April 30.

    The pay gap

    At half the companies in AP’s annual pay survey, it would take the worker at the middle of the company’s pay scale 192 years to make what the CEO did in one. Companies have been required to disclose this so-called pay ratio since 2018.

    The pay ratio tends to be highest at companies in industries where wages are typically low. For instance, at cruise line company Carnival Corp., its CEO earned nearly 1,300 times the median pay of $16,900 for its workers. McDonald’s CEO makes about 1,000 times what a worker making the company’s median pay does. Both companies have operations that span numerous countries.

    Overall, wages and benefits netted by private-sector workers in the U.S. rose 3.6% through 2024, according to the Labor Department. The average worker in the U.S. makes $65,460 a year. That figure rises to $92,000 when benefits such as health care and other insurance are included.

    “With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,” Anderson said. “These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates.”

    Some gains for female CEOs

    This photo provided by Otis Elevator Co. shows CEO Judy Marks. (via AP)

    This photo provided by Otis Elevator Co. shows CEO Judy Marks. (via AP)

    For the 27 women who made the AP survey — the highest number dating back to 2014 — median pay rose 10.7% to $20 million. That compares to a 9.7% increase to $16.8 million for their male counterparts.

    The highest earner among female CEOs was Judith Marks of Otis Worldwide, with a pay package valued at $42.1 million. The company, known for its elevators and escalators, has had operating profit above $2 billion for four straight years. About $35 million of Marks’ compensations was in the form of stock awards.

    Other top earners among female CEOs were Jane Fraser of Citigroup ($31.1 million), Lisa Su of Advanced Micro Devices ($31 million), Mary Barra at General Motors ($29.5 million) and Laura Alber at Williams-Sonoma ($27.7 million).

    FILEw - Jane Fraser, CEO, Citigroup, speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon, File)

    FILEw – Jane Fraser, CEO, Citigroup, speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon, File)

    Lisa Su, CEO of Advanced Micro Devices, arrives for a dinner at the Elysee Palace, during an event on the sidelines of the Artificial Intelligence Action Summit in Paris, Monday, Feb. 10, 2025. (AP Photo/Thomas Padilla, File)

    Lisa Su, CEO of Advanced Micro Devices, arrives for a dinner at the Elysee Palace, during an event on the sidelines of the Artificial Intelligence Action Summit in Paris, Monday, Feb. 10, 2025. (AP Photo/Thomas Padilla, File)

    Christy Glass, a professor of sociology at Utah State University who studies equity, inclusion and leadership, said while there may be a few more women on the top paid CEO list, overall equity trends are stagnating, particularly as companies cut back on DEI programs.

    “There are maybe a couple more names on the list, but we’re really not moving the needle significantly,” she said.

    FILE- Mary Barra, chair and CEO of General Motors, talks to David Rubenstein during an interview hosted by the Economic Club of Washington, Wednesday, Dec. 13, 2023, in Washington. (AP Photo/Stephanie Scarbrough, File)

    FILE- Mary Barra, chair and CEO of General Motors, talks to David Rubenstein during an interview hosted by the Economic Club of Washington, Wednesday, Dec. 13, 2023, in Washington. (AP Photo/Stephanie Scarbrough, File)

    Prioritizing security

    Equilar found that a larger number of companies are offering security perquisites as part of executive compensation packages, possibly in reaction to the December shooting of UnitedHealthCare CEO Brian Thompson.

    Equilar said an analysis of 208 companies in the S&P 500 that filed proxy statements by April 2 showed that the median spending on security rose to $94,276 last year from $69,180 in 2023.

    Among the companies that increased their security perks were Centene, which provides health care services to Medicare and Medicaid, and the chipmaker Intel.

    __

    Reporters Matt Ott and Chris Rugaber in Washington contributed.

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  • US stocks rally to records on hopes for cuts to interest rates

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    NEW YORK (AP) — The U.S. stock market rallied to records on Tuesday after data suggested inflation across the country was a touch better last month than economists expected.

    The S&P 500 rose 1.1% to top its all-time high set two weeks ago. The Dow Jones Industrial Average climbed 483 points, or 1.1%, and the Nasdaq composite jumped 1.4% to set its own record.

    Stocks got a lift from hopes that the better-than-expected inflation report will give the Federal Reserve leeway to cut interest rates at its next meeting in September.

    Lower rates would give a boost to investment prices and to the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed’s chair personally while doing so.

    AP AUDIO: Wall Street rises toward records on hopes for lower interest rates

    AP business correspondent Seth Sutel reports markets are leaning higher.

    But the Fed has been hesitant because of the possibility that Trump’s tariffs could make inflation much worse. Lowering rates would give inflation more fuel, potentially adding oxygen to a growing fire. That’s why Fed officials have said they wanted to see more data come in about inflation before moving.

    Tuesday’s report said U.S. consumers paid prices for groceries, gasoline and other costs of living that were overall 2.7% higher in July than a year earlier. That’s the same inflation rate as June’s, and it was below the 2.8% that economists expected.

    The report pushed traders on Wall Street to increase bets that the Fed will cut interest rates for the first time this year in September. They’re betting on a 94% chance of that, up from nearly 86% a day earlier, according to data from CME Group.

    The Fed will receive one more report on inflation, as well as one more on the U.S. job market, before its next meeting, which ends Sept. 17. The most recent jobs report was a stunner, coming in much weaker than economists expected.

    Some economists warn that more twists and turns in upcoming data could make the Fed’s upcoming decisions not so easy. Its twin goals are to get inflation to 2% while keeping the job market healthy. Helping one with interest rates, though, often means hurting the other.

    Even Tuesday’s better-than-expected inflation report had some discouraging undertones. An underlying measure of inflation, which economists say does a better job of predicting where inflation may be heading, hit its highest point since early this year, noted Gary Schlossberg, market strategist at Wells Fargo Investment Institute. That helped cause some up-and-down swings for Treasury yields in the bond market.

    “Eventually, tariffs can show up in varying degrees in consumer prices, but these one-off price increases don’t happen all at once,” said Brian Jacobsen, chief economist at Annex Wealth Management. “That will confound the Fed and economic commentators for months to come.”

    Other central banks around the world have been lowering interest rates, and Australia’s on Tuesday cut for the third time this year.

    On Wall Street, Intel’s stock rose 5.6% after Trump said its CEO has an “amazing story,” less than a week after he had demanded Lip-Bu Tan’s resignation.

    Circle Internet Group, the company behind the popular USDC cryptocurrency that tracks the U.S. dollar, climbed 1.3% despite reporting a larger loss for the latest quarter than analysts expected. It said its total revenue and reserve income grew 53% in its first quarter as a publicly traded company, which topped forecasts.

    On the losing side of Wall Street was Celanese, which sank 13.1% even though the chemical company delivered a better profit than expected. It said that customers in most of its markets continue to be challenged, and CEO Scott Richardson said that “the demand environment does not seem to be improving.”

    Cardinal Health dropped 7.2% despite likewise reporting a stronger profit for the latest quarter than analysts expected. Its revenue fell short of forecasts, and analysts said the market’s expectations were particularly high for the company after its stock had already soared 33.3% for the year coming into the day.

    Critics say the broad U.S. stock market is looking expensive after its surge from a bottom in April. That’s putting pressure on companies to deliver continued growth in profit.

    All told, the S&P 500 rose 72.31 points to 6,445.76. The Dow Jones Industrial Average climbed 483.52 to 44,458.61, and the Nasdaq composite jumped 296.50 to 21,681.90.

    In stock markets abroad, indexes edged up in China after Trump signed an executive order late Monday that delayed hefty tariffs on the world’s second-largest economy by 90 days. The move was widely expected, and the hope is that it will clear the way for a possible deal to avert a dangerous trade war between the United States and China.

    Japan’s Nikkei 225 jumped 2.1%, and South Korea’s Kospi fell 0.5% for two of the world’s bigger moves.

    In the bond market, the yield on the 10-year Treasury rose to 4.28% from 4.27% late Monday.

    The yield on the two-year Treasury, which more closely tracks expectations for the Fed, fell to 3.73% from 3.76%.

    ___

    AP Business Writers Yuri Kageyama and Matt Ott contributed.

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  • Trump says Intel CEO has an ‘amazing story’ days after calling for his resignation

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    Less than a week after demanding his resignation, President Donald Trump is now calling the career of Intel’s CEO an “amazing story.”

    Shares of Intel, which slid last week after CEO Lip-Bu Tan came under fire from the U.S. president, bounced higher before the opening bell Tuesday.

    The attack from Trump came after Sen. Tom Cotton sent a letter to Intel Chairman Frank Yeary expressing concern over Tan’s investments and ties to semiconductor firms that are reportedly linked to the Chinese Communist Party and the People’s Liberation Army. Cotton asked Intel if Tan had divested from the companies to eliminate any potential conflict of interest.

    Trump said on the Truth Social platform Thursday that, “The CEO of Intel is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!”

    Tan was named Intel CEO in March and it is unclear if he has divested his interests in the chip companies.

    Tan said in a message to employees that there was misinformation circulating about his past roles at Walden International and Cadence Design Systems and said that he’d “always operated within the highest legal and ethical standards.”

    After a Monday meeting with Tan at the White House, Trump backed off his demand that Tan resign without hesitation.

    “I met with Mr. Lip-Bu Tan, of Intel, along with Secretary of Commerce, Howard Lutnick, and Secretary of the Treasury, Scott Bessent,” Trump wrote in a Truth Social post. “The meeting was a very interesting one. His success and rise is an amazing story. Mr. Tan and my Cabinet members are going to spend time together, and bring suggestions to me during the next week. Thank you for your attention to this matter!”

    Shares of Intel gained 3.5% Tuesday

    The economic and political rivalry between the U.S. and China are increasingly focused on computer chips, AI and other digital technologies that are expected to shape future economies and military conflicts.

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  • Nvidia Set to Replace Intel in the Dow Jones Industrial Average

    Nvidia Set to Replace Intel in the Dow Jones Industrial Average

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    (Bloomberg) — Nvidia Corp., the chipmaker at the heart of the artificial intelligence boom, is joining the oldest of Wall Street’s three main equity benchmarks.

    Most Read from Bloomberg

    The company will replace rival Intel Corp. in the 128-year-old Dow Jones Industrial Average prior to the start of trading on Nov. 8, S&P Dow Jones Indices said in a statement late Friday. Sherwin-Williams Co. is also joining, replacing Dow Inc.

    The addition of Nvidia to the blue-chip index is a testament to the power of the AI-driven rally that’s pushed the chipmaker up 900% in the past 24 months. The Dow Jones Industrial Average was the only major US equity benchmark that didn’t hold Nvidia — until now.

    “Nvidia is a well-run company and joining the Dow demonstrates just how powerful its rally has been in recent years after it was at the right place at the right time when no one else was,” said Scott Colyer, chief executive at Advisors Asset Management.

    The Santa Clara, California-based company has been the poster child of the euphoria surrounding AI and the biggest driver of stock market gains. The chipmaker ended the week with a market value of $3.32 trillion, about $50 billion shy of Apple Inc. Shares were up 3.2% in post-market trading, putting Nvidia in a position to dethrone Apple as the world’s most valuable company as soon as Monday if the gains hold.

    Intel joined the gauge in November 1999 when it was added along with Microsoft Corp., SBC Communications and Home Depot Inc. Once the industry leader in computer processors, Intel has been recently struggling under a turnaround plan. The company has slashed spending in 2024, cut jobs and suspended investor payouts. Shares have lost 54% this year, and sank another 2% after the bell.

    “Intel has lagged in a huge way,” said Adam Sarhan, founder of 50 Park Investments. “Now, the Dow is evolving. You don’t want to see stocks that were there 30 years ago. You want to see what’s the strongest that survive today.”

    Midland, Michigan-based Dow Inc. has been in the blue-chip index since 2019, when it was spun off by former parent DowDuPont.

    The Dow Jones Industrial Average, which first started as an index of 12 industrial stocks that included General Electric Co., has faced criticism for being a much narrower equities gauge than the S&P 500 Index or the Nasdaq 100 and lacking technology stocks that have dominated markets in recent years.

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  • Intel scores fresh win against EU after top court backs annulment of billion-euro antitrust fine

    Intel scores fresh win against EU after top court backs annulment of billion-euro antitrust fine

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    LONDON (AP) — Chipmaker Intel won a fresh victory Thursday in a long-running battle with European Union competition watchdogs after the bloc’s top court confirmed a lower tribunal’s decision to overturn a billion-euro antitrust penalty.

    The EU’s Court of Justice upheld the decision to annul the fine issued more than a decade ago, dismissing an appeal from the European Commission, the 27-nation bloc’s top antitrust enforcer.

    The court said it “rejects all of the grounds of appeal raised by the Commission,” according to a press release summarizing the decision.

    Intel said in a statement that it’s “pleased with the judgment delivered by the Court of Justice of the European Union today and to finally put this part of the case behind us.”

    The case dates back to 2009, when the Commission slapped Intel with a 1.06 billion euro fine ($1.14 billion at current exchange rates) for allegedly using illegal sales tactics to shut out smaller rival AMD. The Commission accused Intel of abusing its dominant position in the global market for x86 microprocessors with a strategy to exclude rivals by using rebates.

    Intel scored a surprise win in 2022 when the EU’s General Court overturned the penalty, the decision that the Court of Justice backed on Thursday.

    The latest decision is still not the end of the road for the case, because the company is battling a separate 376.4 million-euro ($406.6 million) fine that Brussels imposed last year targeting some Intel sales restrictions that the General Court found were unlawful in its 2022 ruling.

    Shares of Intel Corp., based in Santa Clara, California, rose slightly before the opening bell Thursday.

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  • CNBC Daily Open: Strong earnings, macro conditions propelling stocks up

    CNBC Daily Open: Strong earnings, macro conditions propelling stocks up

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    The Morgan Stanley headquarters in New York, US, on Wednesday, Dec. 27, 2023.

    Angus Mordant | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets rise on upbeat earnings
    U.S. stocks     resumed their advance Wednesday, as Morgan Stanley and United Airlines earnings topped estimates. Asia-Pacific markets traded mixed Thursday. The CSI 300 real estate index fell nearly 7% even as Beijing announced new measures to support the industry.

    Follow Decision Time for the ECB live
    Market watchers are expecting the European Central Bank to cut rates by 25 basis points at its meeting later today. If that projection pans out, it’d be the third time the ECB’s cutting rates this year. Catch today’s action on Decision Time, CNBC’s live show analyzing the decision, starting 1 p.m. BST.

    New support measures for real estate
    China’s housing ministry said Thursday it’ll broaden its “whitelist” initiative to all commercial housing projects, which aims to complete the construction of unfinished homes. The ministry also announced that bank loans to developers will be speeded up and nearly double to 4 million trillion yuan by the end of 2024, from the 2.23 trillion yuan already approved.

    Potential probe of Intel
    Intel is potentially facing a security review by the Cybersecurity Association of China. Officials allege that Intel’s CPU chips possess vulnerabilities in security management and flaws in product quality. CSAC also accused Intel of using remote management features to surveil users.

    [PRO] A shining sector that’s not tech nor utilities
    Big Tech stocks, fueled by excitement over generative artificial intelligence, have been responsible for most of this year’s rally in the market. Gen AI is powered by energy-hungry data centers, which benefits the utilities sector. But there’s a new group of stocks that’s fast becoming one of the best-performing sectors for the year.

    The bottom line

    The pullback in stocks on Wednesday was brief, like a marathoner pausing to drink before pounding the road again.

    “Yesterday’s weakness does not change the intermediate and long-term uptrends, and we believe it will prove to be just a pullback within the context of a longer-term uptrend,” Piper Sandler said in a note.

    After dipping from its 43,000 level on Tuesday, the Dow Jones Industrial Average rose 0.79% Wednesday to break that barrier again, closing at 43,077.70.

    The S&P 500 climbed 0.47% and the Nasdaq Composite added 0.28%.

    Markets are basking in the glow of a positive earnings season so far. Around 80% of the 50 S&P companies that have posted earnings have topped expectations, according to FactSet data.

    Morgan Stanley, for one, reported third-quarter figures that surpassed earnings and revenue estimates. The bank’s profit jumped 32% from a year ago, far outstripping the LSEG estimate and topping several other big banks’ income growth.

    The investment banking business was a main source of profit for Morgan Stanley. Supported by the U.S. Federal Reserve beginning its rate-cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation, injecting fresh life into Wall Street banks.

    Morgan Stanley popped 6.5% after results. The SPDR S&P Bank ETF has jumped more than 6% over the past five trading days. In another sign of the rally broadening, the banking ETF has outstripped the S&P 500’s climb of less than 1% during the same period.

    “We anticipate the macroeconomic and earnings environments to remain favorable,” UBS says, “which supports staying invested in equities.”

    With monetary policy easing, the economy staying strong and inflation cooling — import prices dipped 0.4% for September, according to the U.S. Labor Department — stocks look like they have stamina to keep going higher.

    – CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.    

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  • ASML just gave us a first glimpse into how U.S. chip export curbs will dent its China sales

    ASML just gave us a first glimpse into how U.S. chip export curbs will dent its China sales

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    An ASML icon is being displayed on a circuit board, alongside the flags of the USA and China, in this photo illustration taken in Brussels, Belgium, on January 4, 2024.

    Jonathan Raa | Nurphoto | Getty Images

    ASML on Tuesday offered the first glimpse into how U.S. restrictions on exports of its advanced chip manufacturing tools to China will impact its sales in the Asian country.

    The Netherlands-based chip equipment maker said in its earnings report Tuesday, which was released a day early due to a “technical error,” that it expects net sales for 2025 to come in between 30 billion euros and 35 billion euros ($32.7 billion and $38.1 billion). This is at the lower half of the range ASML had guided previously.

    ASML is a critical part of the global chip supply chain. The firm’s extreme ultraviolet lithography machines are used by many of the world’s largest chipmakers — from Nvidia to Taiwan Semiconductor Manufacturing — to produce advanced chips.

    While third-quarter net sales at the firm reached 7.5 billion euros — beating expectations — net bookings came in at 2.6 billion euros ($2.83 billion), the company said. That was well below a 5.6 billion euro consensus estimate from LSEG.

    ASML shares plunged as much as 16% on Tuesday in response, causing the firm to shed over $50 billion in market capitalization in a single day, according to CNBC calculations using LSEG data.

    Beyond the disappointment on bookings — which analysts said was due to weakness in a select number of customers, including Intel and Samsung — AMSL also gave an indication of how geopolitical tensions are putting pressure on its 2025 outlook.

    Roger Dassen, ASML’s chief financial officer, said Tuesday that he expects the company’s China business to show a “more normalized percentage in our order book and also in our business.”

    UBS analysts said the change in ASML’s 2025 guidance was mainly related to delays with the development of new logic fabrication facilities from Intel and Samsung, adding that the new guidance implies sales to China would fall 25% to 30% in 2025.

    How important is China to ASML?

    ASML’s China-based customers have been stockpiling the firm’s less advanced machines to get ahead of U.S. export restrictions on the Dutch firm and to continue being able to access its critical technology, which enables them to manufacturer chips for the electronics industry.

    ASML has never sold its most advanced extreme ultraviolet lithography, or EUV machines to Chinese customers due to previous restrictions.

    Instead, chip firms in the country have opted to order ASML’s deep ultra violet lithography, or DUV machines. DUV machines are ASML’s second-tier lithography systems that are critical to make the circuitry of chips.

    Last year ASML sourced 29% of its sales from China. It now expects that contribution from China to drop to around 20% of its total revenue in 2025.

    Sales to China grew dramatically in the first three quarters of 2024 as customers scrambled to buy ASML’s DUV machines in bulk head of U.S. and Dutch export restrictions.

    In the company’s second-quarter 2024 earnings presentation, ASML said that it sourced as much as 49% of its sales from China.

    In September, the Netherlands expanded export restrictions on advanced chip manufacturing equipment by bringing licensing requirements of ASML’s machines under its purview and thereby taking over from the U.S. on controlling what machines ASML is able to export to other countries.

    The move meant that the Dutch government would be able to effectively block ASML from maintaining the DUV machines it has sold to China so far.

    “China is a very important market for China,” Chris Miller, assistant professor of international history at the Fletcher School of Law and Diplomacy at Tufts University and author of the book “Chip War,” told CNBC in emailed comments. “Most of this revenue is from older-generation chipmaking tools.”

    Ironically, restrictions on exports of DUV machines to China “have probably helped ASML on net, because China has accelerated purchases of older generation DUV tools as a result,” Miller added.

    Now, ASML is expecting a drop-off in sales to China as a result of U.S. trade restrictions. The firm expects China to return to taking up a smaller share of its overall global sales in 2025, CFO Dassen said in a transcript of a video interview Tuesday.

    “We do see China trending towards more historically normal percentages in our business,” Dassen said. “So we expect China to come in at around 20% of our total revenue for next year. Which would also be in line with its representation in our backlog.” 

    Analysts at Bank of America said the firm faces a “sharp decline in China revenues.” They added that ASML’s forecast of China accounting for around 20% of its revenue in 2025, implies a 48% revenue decline year-over-year — more severe than the 3% they had anticipated.

    Abishur Prakash, founder of Toronto-based advisory firm The Geopolitical Business, said that demand from China for ASML’s machines is likely to drop significantly as the firm is “severely restricted by export controls.”

    “Like Intel, for whom China is the largest market, ASML is deeply reliant on China,” Prakash told CNBC via email. “For ASML, it is watching what is taking place with China as a potential restriction on business.”

    “As the chip world is cut from China, ASML could see demand for its equipment drop — from China and elsewhere,” Prakash added.

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  • AMD launches AI chip to rival Nvidia’s Blackwell

    AMD launches AI chip to rival Nvidia’s Blackwell

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    AMD launched a new artificial-intelligence chip on Thursday that is taking direct aim at Nvidia’s data center graphics processors, known as GPUs.

    The Instinct MI325X, as the chip is called, will start production before the end of 2024, AMD said Thursday during an event announcing the new product. If AMD’s AI chips are seen by developers and cloud giants as a close substitute for Nvidia’s products, it could put pricing pressure on Nvidia, which has enjoyed roughly 75% gross margins while its GPUs have been in high demand over the past year.

    Advanced generative AI such as OpenAI’s ChatGPT requires massive data centers full of GPUs in order to do the necessary processing, which has created demand for more companies to provide AI chips.

    In the past few years, Nvidia has dominated the majority of the data center GPU market, but AMD is historically in second place. Now, AMD is aiming to take share from its Silicon Valley rival or at least to capture a big chunk of the market, which it says will be worth $500 billion by 2028.

    “AI demand has actually continued to take off and actually exceed expectations. It’s clear that the rate of investment is continuing to grow everywhere,” AMD CEO Lisa Su said at the event.

    AMD didn’t reveal new major cloud or internet customers for its Instinct GPUs at the event, but the company has previously disclosed that both Meta and Microsoft buy its AI GPUs and that OpenAI uses them for some applications. The company also did not disclose pricing for the Instinct MI325X, which is typically sold as part of a complete server.

    With the launch of the MI325X, AMD is accelerating its product schedule to release new chips on an annual schedule to better compete with Nvidia and take advantage of the boom for AI chips. The new AI chip is the successor to the MI300X, which started shipping late last year. AMD’s 2025 chip will be called MI350, and its 2026 chip will be called MI400, the company said.

    The MI325X’s rollout will pit it against Nvidia’s upcoming Blackwell chips, which Nvidia has said will start shipping in significant quantities early next year.

    A successful launch for AMD’s newest data center GPU could draw interest from investors that are looking for additional companies that are in line to benefit from the AI boom. AMD is only up 20% so far in 2024 while Nvidia’s stock is up over 175%. Most industry estimates say Nvidia has over 90% of the market for data center AI chips.

    AMD stock fell 3% during trading on Thursday.

    AMD’s biggest obstacle in taking market share is that its rival’s chips use their own programming language, CUDA, which has become standard among AI developers. That essentially locks developers into Nvidia’s ecosystem.

    In response, AMD this week said that it has been improving its competing software, called ROCm, so that AI developers can more easily switch more of their AI models over to AMD’s chips, which it calls accelerators.

    AMD has framed its AI accelerators as more competitive for use cases where AI models are creating content or making predictions rather than when an AI model is processing terabytes of data to improve. That’s partially due to the advanced memory AMD is using on its chip, it said, which allows it to server Meta’s Llama AI model faster than some Nvidia chips.

    “What you see is that MI325 platform delivers up to 40% more inference performance than the H200 on Llama 3.1,” said Su, referring to Meta’s large-language AI model.

    Taking on Intel, too

    While AI accelerators and GPUs have become the most intensely watched part of the semiconductor industry, AMD’s core business has been central processors, or CPUs, that lay at the heart of nearly every server in the world.

    AMD’s data center sales during the June quarter more than doubled in the past year to $2.8 billion, with AI chips accounting for only about $1 billion, the company said in July.

    AMD takes about 34% of total dollars spent on data center CPUs, the company said. That’s still less than Intel, which remains the boss of the market with its Xeon line of chips. AMD is aiming to change that with a new line of CPUs, called EPYC 5th Gen, that it also announced on Thursday.

    Those chips come in a number of different configurations ranging from a low-cost and low-power 8-core chip that costs $527 to 192-core, 500-watt processors intended for supercomputers that cost $14,813 per chip.

    The new CPUs are particularly good for feeding data into AI workloads, AMD said. Nearly all GPUs require a CPU on the same system in order to boot up the computer.

    “Today’s AI is really about CPU capability, and you see that in data analytics and a lot of those types of applications,” Su said.

    WATCH: Tech trends are meant to play out over years, we’re still learning with AI, says AMD CEO Lisa Su

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  • Wall Street hovers near record highs. Here’s why we want to see choppiness

    Wall Street hovers near record highs. Here’s why we want to see choppiness

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  • Qualcomm reportedly approached Intel for what would be the biggest chip deal ever

    Qualcomm reportedly approached Intel for what would be the biggest chip deal ever

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    Intel Corp. shares climbed after the Wall Street Journal reported that Qualcomm Inc. approached the company about a takeover, a potential record-setting deal for the chip industry.

    The discussions occurred in recent days, the newspaper said, citing unnamed people familiar with the situation. Even so, a deal is far from certain, according to the Journal. Representatives for Intel and Qualcomm declined to comment.

    The shares rose 3.4% to $21.87 in New York trading Friday, rebounding from a decline earlier in the day. The stock remains down 56% this year.

    Intel, once the world’s largest chipmaker, has been struggling with flagging sales and mounting losses — exacerbated by the loss of its technological edge. The company’s market valuation, at $93.5 billion, is now roughly half of Qualcomm’s. Still, a takeover would be the largest-ever transaction for the semiconductor market and potentially transform the industry.

    Shares of San Diego-based Qualcomm declined 2.9%, reflecting investors’ concerns about the risks of such a deal. 

    Intel, based in Santa Clara, California, announced a raft of changes this week aimed at getting its business back on track. The moves included a multibillion-dollar deal with Amazon.com Inc. to make a custom AI semiconductor and a plan to turn Intel’s ailing manufacturing business into a wholly owned subsidiary.

    Qualcomm is the world’s biggest designer of smartphone processors, but it’s been trying to branch out into more areas. That includes chips that that run personal computers, where Intel is still the dominant player.

    Like much of the industry, Qualcomm doesn’t do its own chip production. It outsources manufacturing to partners like Taiwan Semiconductor Manufacturing Co., which also makes chips for Nvidia Corp. and Advanced Micro Devices Inc.

    Acquiring Intel could potentially provide Qualcomm with access to its own production in the US, as well as giving it the biggest brand in the market for PCs and traditional server computers.

    But Intel’s problems wouldn’t be solved by a Qualcomm takeover. The would-be suitor also has no experience in handling manufacturing or doing the science behind cutting-edge production technology — an area where TSMC excels.

    Qualcomm was involved in a contentious takeover saga more than six years ago, when Broadcom Inc. attempted to acquire the company. Broadcom walked away from the bid after President Donald Trump blocked the deal, citing national security risks.

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  • CNBC Daily Open: Rate cuts might not benefit tech the most

    CNBC Daily Open: Rate cuts might not benefit tech the most

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    The sun rises behind the skyline of lower Manhattan and One World Trade Center as people walk along the Hudson River on September 14, 2024, in Jersey City, New Jersey. 

    Gary Hershorn | Corbis News | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Record close for Dow
    The     S&P 500 and Dow Jones Industrial Average rose on Monday, with the Dow notching a record close. But the Nasdaq Composite fell. Asia-Pacific stocks were mixed. Japan’s Nikkei 225 fell 1.03% as the Japanese yen strengthened to 140.54 against the U.S. dollar. Hong Kong’s Hang Seng index climbed 1.15% as Midea Group shares jumped over 9% in their Hong Kong debut.

    Next move for the BOJ
    The Bank of Japan won’t be raising interest rates at its September meeting, according to a CNBC survey of 32 analysts. However, the outlook for its October and December meetings is less certain. Almost 20% think an October hike is likely, while 25% said the bank’s next hike will be in December.

    India’s slowing deposit growth
    Reserve Bank of India Governor Shaktikanta Das told CNBC in an exclusive interview that slowing growth in deposits is not a cause for concern currently, and said banks are “coming out with new products for deposit mobilization.”

    Intel forges new path for foundry
    Intel shares popped around 8% in extended trading on news the chipmaker plans to structure its foundry business as an independent unit with its own board and ability to raise outside funding. It might even spin off the business as a public company, according to a person with knowledge of the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion under the CHIPS Act.

    [PRO] “Golden age of fixed income”
    The U.S. Federal Reserve is poised to cut interest rates this week. Benchmark rates affect borrowing costs. This means bond yields will go down as the Fed lowers rates. Rick Rieder, BlackRock’s global chief investment officer of fixed income, thinks now’s the time for investors to take advantage of this “golden age of fixed income.”

    The bottom line

    Technology stocks benefit the most from low interest rates, conventional market wisdom says.

    That’s because tech companies tend to promise future profit in exchange for present money. When rates are low, that proposition appears attractive because returns are low elsewhere. But when rates are high, those promises don’t seem as attractive as less risky returns from assets such as Treasurys.

    The past two years have demolished this narrative. Tech has soared even as interest rates have been at 23-year highs, thanks to enthusiasm over artificial intelligence’s promise of new and explosive revenue streams.

    Nvidia, the lynchpin of AI, has soared nearly 136% just this year. Meta, which has its own AI model named Llama, is up about 51%.

    With the market pricing in a 67% chance — up from 30% last week — that the U.S. Federal Reserve will make a larger-than-usual cut of 50 basis points, according to the CME FedWatch Tool, it stands to reason tech will pop further.

    The sector, however, has been rocky in recent weeks. The VanEck Semiconductor ETF, for instance, fell 1.31% Monday, while Nvidia slipped 1.95%.

    The tech-heavy Nasdaq Composite fell 0.52%, while the S&P 500 inched up 0.13% and the Dow Jones Industrial Average added 0.55% to close at a new record.

    This implies investors have been moving out of tech to other sectors that might experience tailwinds amid lower rates. Case in point: the financial and energy sectors rose more than 1% on Monday, performing better than the broader market.

    Goldman Sachs noted hedge funds’ weekly purchases last week of financial stocks were the highest since June 2023.

    “Other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Christopher Barto, senior investment analyst at Fort Pitt Capital.

    That doesn’t mean tech’s out of favor. It’s likely to continue driving the market. But other sectors might show up for the ride.

    – CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this story.

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  • CNBC Daily Open: Tech might not be the biggest beneficiary of rate cuts

    CNBC Daily Open: Tech might not be the biggest beneficiary of rate cuts

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    The sun rises behind the skyline of lower Manhattan and One World Trade Center on September 14, 2024, in Jersey City, New Jersey. 

    Gary Hershorn | Corbis News | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Record close for Dow
    U.S. markets were     mixed on Monday. The S&P 500 and Dow Jones Industrial Average rose, with the Dow notching a record close. But the Nasdaq Composite fell. The pan-European Stoxx 600 index lost 0.16%. U.K.’s FTSE 100 ended flat. The Bank of England will meet Thursday for its latest monetary policy decision.

    Intel forges new path for foundry
    Intel shares popped around 8% in extended trading on news the chipmaker plans to structure its foundry business as an independent unit with its own board and ability to raise outside funding. It might even spin off the business as a public company, according to a person with knowledge of the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion under the CHIPS Act.

    Blemished Apple
    Apple shares slid 2.78% after TF Securities analyst Ming-Chi Kuo reported demand for Apple’s new iPhone 16 was down 12% year on year compared with the iPhone 15’s first-weekend sales. Kuo also said consumers weren’t enthused because Apple Intelligence wasn’t available with the iPhone at launch, and as competition from Chinese manufacturers dents iPhone demand.

    Choppy flight
    Boeing is implementing a hiring freeze amid plans to cut costs, such as pausing nonessential staff travel. Just this year, Boeing has had to deal with: a 737 MAX door panel blowing out in midair; its Starliner spacecraft returning to Earth without its two planned passengers; and a strike by more than 30,000 workers.

    [PRO] Short-lived record?
    The S&P 500 is less than 1% away from its record high set in July. The upcoming Federal Open Market Committee meeting, at which the U.S. Federal Reserve is expected to cut interest rates by at least 25 basis points, might lift the S&P to new heights. But analysts warn the new high might be short lived.

    The bottom line

    Technology stocks benefit the most from low interest rates, conventional market wisdom says.

    That’s because tech companies tend to promise future profit in exchange for present money. When rates are low, that proposition appears attractive because returns are low elsewhere. But when rates are high, those promises don’t seem as attractive as less risky returns from assets such as Treasurys.

    The past two years have demolished this narrative. Tech has soared even as interest rates have been at 23-year highs, thanks to enthusiasm over artificial intelligence’s promise of new and explosive revenue streams.

    Nvidia, the lynchpin of AI, has soared nearly 136% just this year. Meta, which has its own AI model named Llama, is up about 51%.

    With the market pricing in a 62% chance — up from 30% last week — that the U.S. Federal Reserve will make a larger-than-usual cut of 50 basis points, according to the CME FedWatch Tool, it stands to reason tech will pop further.

    The sector, however, has been rocky in recent weeks. The VanEck Semiconductor ETF, for instance, fell 1.31% Monday, while Nvidia slipped 1.95%.

    The tech-heavy Nasdaq Composite fell 0.52%, while the S&P 500 inched up 0.13% and the Dow Jones Industrial Average added 0.55% to close at a new record.

    This implies investors have been moving out of tech to other sectors that might experience tailwinds amid lower rates. Case in point: the financial and energy sectors rose more than 1% on Monday, performing better than the broader market.

    Goldman Sachs noted hedge funds’ weekly purchases last week of financial stocks were the highest since June 2023.

    “Other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Christopher Barto, senior investment analyst at Fort Pitt Capital.

    That doesn’t mean tech’s out of favor. It’s likely to continue driving the market. But other sectors might show up for the ride.

    – CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this story.

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  • Citi believes this week’s chip stock drop is a buying opportunity, especially in one name

    Citi believes this week’s chip stock drop is a buying opportunity, especially in one name

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  • Intel’s Sales Slump Shows Price of Falling Behind in AI Race

    Intel’s Sales Slump Shows Price of Falling Behind in AI Race

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    (Bloomberg) — Intel Corp. plunged more than 19% after delivering a barrage of startling news, including a grim growth forecast and plans to slash 15,000 jobs, in the latest sign that the chipmaker is ill-equipped to compete in the artificial intelligence era.

    Most Read from Bloomberg

    Sales for the current quarter will be $12.5 billion to $13.5 billion, the company said Thursday. Analysts had projected $14.38 billion on average, according to data compiled by Bloomberg. Intel will have a loss of 3 cents a share, excluding certain items, versus expectations for a profit 30 cents.

    Intel said it plans to cut more than 15% of its workforce of around 110,000 people. It’s also suspending dividend payments to shareholders starting in the fourth quarter, and will continue that until “cash flows improve to sustainably higher levels,” according to the statement. The company has paid a dividend since 1992.

    “I have no illusions that the path in front of us will be easy,” Chief Executive Officer Pat Gelsinger said in a memo to employees. “You shouldn’t either.” He called the moves “some of the most consequential changes in our company’s history.”

    Gelsinger, despite a massive spending plan to restore Intel to industry prominence, is struggling to improve the company’s products and technology fast enough to retain customers. The results underscore a dramatic decline for Intel, which dominated the semiconductor industry for decades and is now forced to tout cost cutting measures and give reassurances that it can fund growth plans.

    “Revenue is not where we want it to be,” said Chief Financial Officer Dave Zinsner in an interview. “Financials weren’t where we want them to be.” The job cuts were needed “to get us to a place where we have a more sustainable model for the business going forward.”

    In the second quarter, the company had a profit of 2 cents a share, excluding certain items, and revenue of $12.8 billion, down 1%. Analysts had estimated a profit of 10 cents a share and sales of $12.95 billion. Wall Street is projecting a modest increase in overall sales this year from 2024, still leaving the company more than $20 billion below its peak in 2021.

    Competitors who specialize in artificial intelligence are winning over some of Intel’s customers. Nvidia Corp. now has more than twice its former nemesis’ quarterly sales. Once a struggling rival, Advanced Micro Devices Inc. is valued more than $100 billion higher by investors and Taiwan Semiconductor Manufacturing Co. is widely recognized as having the industry’s best production.

    Gelsinger remains confident that Intel is on the right track in the long run. He’s argued that Intel’s vital manufacturing is on course to catch and pass those of rivals and that’ll attract outside customers, and justify the string of new plants Intel is building. He thinks Intel has paid what it needs to catch up to the industry, and now can focus on its finances.

    Some of Intel’s best chips are manufactured by others. Over time, the company hopes to shift more of its chip manufacturing to its own plants, which are being upgraded. The company is also working to accelerte improvements in chips for AI PCs. But for now, the expenses are squeezing gross margins, Zinsner said.

    Gross margin, or the percentage of sales remaining after deducting the cost of production, was 35.4% in the quarter. That measure will stay flat in the current quarter. At it’s peak, Intel regular reported gross margin of well above 60%.

    The company is reducing its spending on new plants and equipment in 2024 by more than 20%, and is now budgeting between $25 billion and $27 billion. Next year, expenses will range between $20 billion and $23 billion.

    Intel shares fell in extended trading following the announcement, after closing at $29.05 in New York The company has slipped more than 42% so far this year. It’s the second-worst performer on the Philadelphia Stock Exchange Semiconductor Index this year.

    Most of the job reductions, needed also to remove bureaucracy and speed up decision making, will be completed by the end of the year, Gelsinger told staff.

    “Our costs are too high, our margins are too low,” he wrote, saying he would take employee questions at an internal meeting. “We need bolder actions to address both — particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

    Intel was forced to reduce its sales expectations in May after the US government revoked its license to supply chips to China’s Huawei Technologies Co., part of Washington’s push to cut off that company for what it alleges are national security risks.

    The chipmaker is reporting earnings for the second time under a new business structure that shows the financial performance of its manufacturing operations. Gelsinger has said the restructuring was a necessary step to make operations more efficient and competitive.

    The company reports revenues divided between product groups and its manufacturing operations, with factories undergoing a massive upgrade and build-out program that’s weighing heavily on profits.

    Revenue is improving at what it calls its Foundry unit, gaining 4% from a year earlier to $4.32 billion. PC chips also posted growth, up 9% from the same period a year earlier.

    Sales at the crucial data center unit, once the most profitable, again lost ground, declining 3% to $3 billion. That unit hasn’t yet achieved anything like the market presence of Nvidia in accelerator chips used in artificial intelligence systems. AI is proving a gold mine, and cutting into spending on the type of processor Intel makes.

    (Adds comments from CEO from ninth paragraph, details of margin erosion.)

    Most Read from Bloomberg Businessweek

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