Intel shares fall on one of the worst forecasts in history

Shares of Intel Corporation fell on Thursday after the end of trading by 9.6%. It happened after publications one of the worst forecasts of its activities, which the company has published since its inception. Intel expects first-quarter revenue to be between $10.5 billion and $11.5 billion, up from $18.4 billion a year earlier and $13.9 billion forecast by analysts. Intel expects a loss of $0.15 per share – analysts had forecast earnings of $0.24 per share.

“We stumbled, we lost share and we lost momentum. I think that this year the situation will stabilize,” said Intel CEO Pat Gelsinger in this regard. This, he said, is partly due to the weakness of the two largest markets that buy the company’s chips – PC sales are falling after a sharp increase in demand during the pandemic, and corporate customers who bought chips for data centers are less active in the face of macroeconomic difficulties.

Revenue of Intel in the fourth quarter decreased by 32%, having made $14 billion. Net loss was $664 million against profit of $4.6 billion the previous year. In 2022 as a whole, the company’s revenue decreased by 20%, to $63.1 billion, and net profit – by 60%, to $8 billion.

Following the release of Intel’s financials and forecasts, shares of other chip makers also fell, with AMD shares down 2.6% and Nvidia shares down 2%. True, shares of Asian chip makers rose on Friday morning: Samsung – by 1%, and in general, the Bloomberg Asia Pacific Semiconductors Index – by 0.6%. “The results are bad for Intel, but we don’t think they are bad for the entire chip sector,” said Daniel Yu, director of global strategy at South Korean company Yuanta Securities Korea. According to him, the decline in demand for PCs and chips for them was known and earlier, while demand for chips in other sectors, such as auto manufacturing and cloud computing, remains strong.

Yana Rozhdestvenskaya