Shares of Intel fell sharply after the company missed earnings estimates for the current quarter, causing its stock to plummet more than 12%. Although the company reported better-than-expected results for the December quarter, Intel predicted lower adjusted earnings and sales for the first quarter of the year, causing significant concern among analysts and investors.
The company cited “material inventory corrections” in automotive and programmable chips as a reason for the lower guidance, leading the CFO to predict a “slightly sub-seasonal” outlook for Intel’s core businesses. Despite the disappointing Q1 outlook, CEO Pat Gelsinger believes it to be a temporary setback, expecting sequential and year-on-year growth in both revenue and earnings per share for each quarter of fiscal year 2024. Additionally, Intel’s Data Center and AI unit experienced a 10% sales decline in the fourth quarter, overshadowing strong performance in the PC chip business.
Multiple Wall Street firms have slashed their price targets on Intel stock, and two other firms downgraded Intel shares to hold from buy. On the bright side, Intel has announced foundry collaborations with United Microelectronics and Tower Semiconductor, aiming to address high-growth markets with the development of a new semiconductor process platform. Overall, Intel stock has a mediocre composite rating of 78, which continues to raise concerns among industry experts and investors.
