Intel shares fell sharply by more than 20% during extended trading on Thursday. The decline followed disappointing fourth-quarter forecasts, mainly due to a downturn in the PC sector and operational obstacles within the data centre division.
For the fourth quarter, Intel expects revenue of between $15 billion and $16 billion (€13.4–14.3 billion). That is below the $17 billion (€15.1 billion) analysts had anticipated. The company also forecasts adjusted earnings per share of 25 cents, significantly below the expected 43 cents.
A major cause of this downturn is the shortage of memory chips, which has driven up costs and dampened consumer interest in desktop computers and laptops. According to TrendForce, manufacturers have reached a ceiling on the prices they can pay for memory.
Consequently, Intel predicts that the PC market will shrink by 12% this year and by a further 10% by 2027. CEO Lip-Bu Tan expressed his concerns to Bloomberg, suggesting that memory price trends could pose serious challenges for the entire industry by 2027.
Tan also noted that the data centre division’s performance had been hampered by the closure of a production facility in Israel and shortages of essential raw materials.
Despite the gloomy outlook, the company’s third quarter results remained robust. Total revenue rose by 21% to $16.5 billion (€14.7 billion), driven by a huge 78% increase in revenue from AI and data centres, which reached $7.3 billion (€6.5 billion). By contrast, revenue from PC chips fell by 5% to $8.1 billion (€7.2 billion).
Before this decline, Intel shares had more than doubled over the past year as investors banked on growth driven by artificial intelligence. To support its strategic recovery efforts under Tan’s leadership, the company recently raised $15 billion (€13.4 billion) through a share sale.
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