Intel forecast fourth-quarter revenue of $15B to $16B, below the $17B analysts expected, as a memory chip shortage hits PC demand and supply problems slow its data centre unit. Shares fell more than 20% in late trading. Third-quarter revenue rose 21% to $16.5B.
Intel shares fell more than 20% in late trading on Thursday after its sales forecast missed Wall Street’s estimates, Bloomberg reported. A slump in PC sales and supply problems in its data centre business weighed on the outlook.
Intel expects fourth-quarter revenue of $15B to $16B, below the $17B analysts expected on average. It forecast adjusted earnings of 25 cents a share, against estimates of 43 cents.
PC makers are struggling with a shortage of memory chips, which has pushed up prices and cut demand for laptops and desktops. Intel expects the PC market to shrink 12% this year and another 10% in 2027. PC makers have hit their limit on what they can pay for memory, research firm TrendForce said in September.
“Memory pricing went up a lot. I think my prediction is that in 2027 it is going to be a very severe issue to all of us,” chief executive Lip-Bu Tan told Bloomberg.
Tan said the data centre unit would have done better without shortages of some raw materials and a factory shutdown in Israel.
The third quarter itself was strong. Revenue rose 21% to $16.5B, data centre and AI sales jumped 78% to $7.3B, and PC chip sales fell 5% to $8.1B. That follows the fastest growth in more than a decade last quarter.
The stock had more than doubled this year as investors bet Intel would gain from AI. The company recently sold $15B in shares to fund its turnaround under Tan.
If you liked the article, do not forget to share it with your friends. Follow us on Google News too, click on the star and choose us from your favorites.
If you want to read more like this article, you can visit our Technology category.
