Intel shares plunged more than 12% on Friday (26) after a pessimistic forecast signaled that the boom in artificial intelligence (AI) is shifting corporate spending away from its traditional chips towards data centers.
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The stock's value is down about 30% year-to-date as Intel lags behind rival chip companies such as Nvidia in producing advanced artificial intelligence chips and components.
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A Intel projected revenue of $12,5 billion to $13,5 billion for the second quarter, compared with the average analyst estimate of $13,57 billion, according to LSEG data.
“While we believe they are doing everything they can to try to fix things, it is clear that the company is deeply fragile and it will take years to see the fruits of their (current) exhaustive work,” Bernstein analysts said. in a note.
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Intel is planning a $100 billion spend across four U.S. states to build and expand factories. The company also unveiled a new AI chip earlier this year to keep up with the competition.
Friday's drop is expected to remove around US$19 billion from the company's market value, which was US$149,4 billion at Thursday's close.
Companies have prioritized spending on fast, advanced AI server chips, hurting demand for Intel's central processing units, which have long been the main chip powering data centers.
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The company's results contrast with the strong results of Microsoft and Alphabet, which are customers of Nvidia and also design chips in-house for their data centers.
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