Intel’s ‘Historic Collapse’ Sparks Selloff In Chip Stocks

 

Intel Corp spooked Wall Street with a pessimistic first-quarter outlook, sparking a plunge in chipmaker stocks on Friday, with some analysts expressing concerns about its cash position amid a semiconductor recession.

The company’s shares fell 10% in pre-market trading after Intel predicted unexpected losses below expectations and provided earnings guidance that he undershot expectations by $3 billion.

Intel supplier KLA Corp is down more than 5% on his own pessimistic forecast, while Advanced Micro Devices, Nvidia, Applied Materials and Qualcom are between 0.8% and 3.2% on him. fell.

The forecast puts Intel on track to deliver its worst performance to date, with sluggish PC demand and slowing growth in his data center business following the pandemic prompting CEO Pat Gelsinger’s highlights the challenges faced by

“There are no words to describe or explain Intel’s historic collapse,” said Hans Mosesmann, an analyst at Rosenblatt Securities.

Once a dominant player in both the PC and data center markets, the company steadily lost ground to rivals such as AMD, which struck deals with chip makers such as Taiwan-based TSMC, while Intel’s We make chips that outperform technology.

Even if the expected data center market bottoms out in the second half of 2022, Intel will be at a disadvantage as it had lost more market share by then, some analysts say.

“AMD’s Genoa and Bergamo chips have strong price and performance advantages compared to Intel’s Sapphire Rapids processors, which should drive AMD’s stock price even higher,” said YipitData. Analyst Matt Wegner said.

Intel’s results are also expected to significantly reduce the company’s available cash flow as the CEO seeks to revitalize the business by expanding contract manufacturing and building new factories in the US and Europe.

Bernstein analysts said, “It’s become clear why Intel needs to cut so many costs when Intel’s original plans have proven to be fantastic.” rice field.

Originally published at https://businessdor.com on January 27, 2023.