Intel's stock fell 21% in after-hours trading after the chipmaker issued a weaker-than-expected revenue and margin forecast for the current quarter. The company reported third-quarter revenue of $16.5 billion, in line with expectations, but projected sales of $15 billion to $16 billion, below the $17 billion analysts anticipated. Intel warned that gross margins would drop to 37% due to a memory chip shortage and rising costs.
The results mark a setback for the company's turnaround efforts following a $20 billion stock offering in August. CEO Lip-Bu Tan stated the company is working urgently to unlock supply to boost chip sales. The PC market suffered more than expected from component shortages, while data centre builders outbid other parts of the supply chain.
Intel also faced a financial hit from an explosion at its Israel facility that killed two employees. CFO David Zinsner indicated a slowdown in the PC market would persist into the first half of next year. Global PC shipments fell 21% in the third quarter.
Intel faces mounting competition from AMD, Qualcomm, and Nvidia. Its data centre and AI revenue reached $7.3 billion, up 78% year-on-year. The company reported $4 billion in capital expenditure for the quarter and pledged to spend $20 billion in 2026.
Source: Financial Times Companies · Summarized by HeadlinesBriefing