Intel shares fell more than 20% in extended trading after the chipmaker issued a weak fourth-quarter forecast. The company cited continued softness in the global PC market, even as data center and AI revenue jumped in the third quarter.
Intel shares plummeted more than 20% in extended trading on Thursday after the chipmaker issued a weak fourth-quarter forecast. Intel pointed to continued softness in the global PC market.
The selloff followed the third-quarter report. Intel reported adjusted earnings of 52 cents per share versus 40 cents expected, according to LSEG. Revenue was $16.51 billion against $16.5 billion expected.
Guidance falls short of analyst estimates
For the current quarter, Intel expects adjusted earnings per share of 25 cents on revenue between $15 billion and $16 billion. Analysts had expected revenue of $17.1 billion and EPS of 43 cents, according to LSEG.
Revenue in the client computing and physical AI group fell 5% from a year earlier to $8.1 billion, missing estimates. Data center and AI revenue, however, jumped 78% to $7.3 billion.
Finance chief David Zinsner described how long the PC slowdown could run. According to the earnings release: "We see the PC slowdown continuing at least through the first half of next year," Zinsner said.
Fab explosion adds to the hit
The forecast also reflects an explosion at a fab in Israel earlier this month that killed two workers and seriously injured a third. Zinsner said the incident will cost about $600 million in lost revenue over two quarters. CEO Lip-Bu Tan said the blast caused an extended shutdown at the plant, impacting shipments of 10-nanometer chips.
Stock was up about 150% before the report
Before the report, Intel's stock was up about 150% this year, though it had fallen roughly 23% in October amid growing concern over the size of the artificial intelligence buildout.
Tan said Intel is making progress on its 14A chips, and he expects a couple of customers ready to announce over the next two quarters. For now, Intel has no major external customers for its new chips.
Source: CNBC
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