Intel stock plunges 20% as chipmaker blames PC slowdown for weak guidance
Intel has been a Wall Street darling this year due to its emergence as a player in AI, but the company is being weighed down by a struggling PC market.
Intel's disappointing quarterly earnings sent shockwaves through chip stocks on Thursday, spurring a decline in post-close trading. The semiconductor index suffered as Intel blamed near-term headwinds in the PC industry, causing its shares to plummet 18 percent in the after-hours session. This followed Alphabet's earnings report, which caused the SOX to drop 1.4 percent during regular trading hours.
Intel also announced a $600 million loss in revenue due to a factory explosion in Israel that had been shut down for two weeks. Other chip stocks, including AMD and Broadcom, followed the trend downward, with AMD dropping 4 percent and Broadcom falling 2 percent. Despite the negative sentiment, investors were quick to react, with specialized ETFs like the Direxion Daily Semiconductor Bull ETF plummeting 9 percent.
Google parent Alphabet also suffered a 13 percent drop, highlighting the importance of earnings reports. While the SOX has been a standout performer, its momentum has been tested by tighter financing terms, leading to pressure on some AI infrastructure firms. However, analysts believe the post-market trading may be overreacting to Intel's news, which is more related to PC sector issues rather than AI.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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