Apple’s iPad eats into Intel’s profits?

Intel was clobbered after Barclays Capital said Apple’s iPad is eating away at sales of PCs and netbooks that use its chips. The firm cut shares of the world’s largest chipmaker to ‘equal weight’ from ‘overweight.’

"The iPad’s tablet momentum has pressured the broader netbook and lower-end notebook arena," wrote Tim Luke, semiconductor analyst for Barclays. "We recognize that reservations of Intel’s historically elevated margins at 67 percent and uncertainties over its position in growth areas such as Tablets may restrain the multiple investors attach to current earnings."

Intel, the worst performer in the Dow Jones Industrial Average Wednesday, is now down for the year, while Apple is up 23 percent. The two stocks began to diverge right on cue in April, when Apple released the iPad that uses a self-designed called the "A4".

The downgrade by Barclays comes at a time when many value investors are considering purchasing this stock at these levels. The analyst, who includes a chart in his report showing Intel’s forward price-earnings ratio at an all-time low, also cited a slowdown in back-to-school PC sales based on channel checks in Asia. Tablet alternatives using Intel’s Atom chip are more likely to be released in the first quarter of next year, Barclays’ Luke said.

Other analysts were ganging up on the chipmaker as well. Baird cut Intel to ‘neutral’, citing a "sharp deterioration in PC-related order trends over the past week."

"Notebook units are now expected to be up at best 5 percent sequentially for the third quarter, well below expectations,” wrote Baird’s Tristan Gerra. A September demand rebound is "increasingly unlikely."

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team

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