Intel Corp. said Thursday it expects to post a loss for the quarter and gave a bleaker-than-expected outlook for the PC market and its slow-growing key data center division, surprising investors and causing shares to plunge more than 9 percent in after-hours trading.
Intel CEO Pat Gelsinger said on a fourth-quarter conference call: “We’re stumbling, losing market share, losing momentum. We think we’ll stabilize this year,” he said. He said Intel’s share of the data center market has been declining, which is actually a testament to the strength of its rival AMD.
Thursday’s close, Intel shares rose 1.31 percent. As of 18:53 EST Thursday (7:53 GMT Friday), Intel shares fell $2.93, or 9.74 percent, to $27.16, with a market value of $124.2 billion. Meanwhile, shares of other chip companies are also falling. AMD is down 2.6 percent and Nvidia is down 2 percent.
Intel shares plunged 9.74 percent after hours
Two of Intel’s most important markets experienced two years of strong growth, supported by a telecommuting boom during the epidemic, but are now showing weakness. Today, the personal computer industry is grappling with an oversupply of chips as demand for consumer electronics plunges and corporate customers worried about the recession are slowing spending on data centers.
Customers are also clearing out their inventories, Kissinger said. “We expect to see some of the largest inventory adjustments we’ve seen in the industry, which will have a significant impact on first-quarter earnings guidance.” He said.
“AMD is not immune,” said Wayne Lam, an analyst at CCS Insight. “Don’t think we’ve seen the trough in Intel stock… … they’re not running a sustainable business model.”
Intel’s profit margin fell to 43.8 percent in the fourth quarter of last year from 58.4 percent in the fourth quarter of 2020 and is expected to fall further in the first quarter. Long time.”
