PC Weak market coupled with supply chain disruptions: Intel's earnings guidance falls short of expectations, stock price plummets 23% after the market close
The Block
53m ago
Ai Focus
Intel warns that due to the weak personal computer market, manufacturing bottlenecks, and substantial expansion expenses, the company will experience a net cash outflow this year, and this weak demand may continue until the first half of 2027. The company's guidance for revenue and earnings per share in the fourth fiscal quarter fell short of market expectations, causing the stock price to plummet by 23% after the market closed.
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Intel issued a warning stating that due to the weak personal computer market, bottlenecks in the manufacturing process, and substantial expansion expenses, the company will experience a net outflow of cash this year. Intel's stock price plummeted by 23% after the market closed.

Like many tech giants, Intel has been heavily investing in chip manufacturing in the past. However, supply chain disruptions have weakened its ability to capitalize on the growing demand for data center chips. At the same time, soaring memory prices have increased the manufacturing costs of PC, further hitting consumer demand.

Intel warns that this weak demand trend may continue until the first half of 2027, and the company's revenue forecast for the fourth quarter also falls short of market consensus.

Intel expects revenue for the fourth fiscal quarter to be between $15 billion and $16 billion, with analysts' average forecast at $17 billion, and some predictions even exceeding $18 billion. Excluding certain items, earnings per share for the fourth quarter are expected to be 25 cents, while Wall Street anticipates 43 cents.

"I am very regretful that we were unable to fully meet the strong demand from customers this quarter," said Intel CEO Chen Liwu during an analyst conference call. "We are currently facing a number of severe challenges, including shortages in manufacturing supply, an unprecedented memory supply crisis, and the resulting weak demand for PC."

If Intel's stock price maintains a 23% decline during regular trading hours on Friday, its total market value will evaporate by over $112 billion (Note from IT: The current exchange rate is approximately 747.808 billion yuan); previously, the stock's cumulative increase for the year had already more than doubled.

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