Intel's 'historic collapse' sparks selloff in chip stocks
Technology
Intel’s 'historic collapse' sparks selloff in chip stocks
(Reuters) - Intel Corp (INTC.O) stumped Wall Street with a dismal first-quarter outlook, triggering a rout in shares of chipmakers on Friday and prompting some analysts to raise concerns about its cash position in a semiconductor downturn.
The company’s shares were down 10% in premarket trading after Intel predicted a surprise loss for the period and provided a revenue forecast that was below estimates by $3 billion.
Intel supplier KLA Corp (KLAC.O) fell more than 5% after its own dismal forecast, while Advanced Micro Devices (AMD.O), Nvidia (NVDA.O), Applied Materials (AMAT.O) and Qualcomm (QCOM.O) lost between 0.8% and 3.2%.
The projections put Intel on track for some of its worst results on record and underscore the challenges facing Chief Executive Pat Gelsinger due to a post-pandemic slump in PC demand and slowing growth in the data centre business.
“No words can portray or explain the historic collapse of Intel,” said Hans Mosesmann, an analyst at Rosenblatt Securities, who was among the 16 analysts who cut their price targets on the stock.
Once the dominant player in both PC and data centre markets, the company has been steadily losing share to rivals such as AMD, which has used contract chipmakers such as Taiwan-based TSMC (2330. TW) to make chips that outpace Intel’s technology.
