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Intel Stock Plummets Amid Weak Guidance
1 Nov
Summary
- Intel's shares dropped over 28% on Friday.
- AI and data center sales soared, but PC revenue declined.
- Fourth-quarter guidance fell short of Wall Street expectations.
Intel's stock saw a sharp decline of more than 28% on Friday, triggered by its revenue and earnings guidance for the fourth quarter. The chipmaker reported a 21% year-over-year increase in third-quarter revenue to $16.5 billion. While its data center and AI-related sales surged by 78% to $7.3 billion, the client computing segment experienced a 5% revenue decrease, reaching $8.1 billion.
This downturn in PC revenue was partly attributed to rising memory chip prices impacting corporate IT budgets. Despite a significant increase in adjusted net income and earnings per share for the third quarter, investor confidence wavered due to the company's future outlook. Management forecast fourth-quarter revenue between $15 billion and $16 billion, with adjusted earnings per share of $0.25, significantly below analysts' predictions.
Further compounding concerns were an accident at Intel's Israel factory, leading to reduced server chip shipments, and the persistent shortage of memory chips expected to last through the decade. This prolonged shortage is anticipated to hinder the recovery of Intel's PC business for at least the first half of the upcoming year.