Intel stock plunges toward record loss as PC sales slow down
Intel shares dropped over 20 percent in extended trading.
The short version
- The chip maker forecast December quarter revenue below analyst expectations.
- Rising memory prices and tight budgets slowed PC demand.
- That means pricier computer parts ahead for your business.
Why it matters to you. If you buy computer hardware or servers for your business, expect component costs to remain bumpy as chip makers navigate these supply and manufacturing shifts.
Intel, the historic American semiconductor giant, is pacing toward a double-digit stock drop that could wipe out more than $100 billion in market value in a single day, according to Dow Jones Market Data. That would mark the largest one-day market capitalization loss in the company's history after a weak personal-computer market spooked investors on Thursday.
Intel, which has faced mounting pressure over its place in the artificial intelligence era, blamed a slower PC market for a fourth-quarter revenue forecast of $15 billion to $16 billion, coming in well below the $17.1 billion expected by FactSet. Within the PC market, demand has slowed as memory-chip prices have risen dramatically and companies face more limited information-technology budgets, Intel Chief Financial Officer David Zinsner said on an earnings call.
The pressure wasn't a shock given surging memory prices, but the negative impact came sooner and deeper than expected, John Pitzer, Intel's corporate vice president of investor relations, told MarketWatch. Intel's outlook was further weighed down by an explosion at one of its chip-making facilities in Israel earlier this month, which reduced the fourth-quarter forecast by $300 million.
Advanced Micro Devices, another maker of personal-computer chips, also saw its shares fall more than 6 percent in after-hours trading. While demand for Intel's central processing units for data-center servers has surged with the rise of artificial intelligence, it is not enough to support the company through near-term challenges.
