Intel shares fall about 30% on weak forecast and PC demand
A Israel plant shutdown, weak PC demand and rising AI costs weighed on the chipmaker's outlook, and the US government's stake lost about $12 billion.
Key facts
Story- Intel shares fell about 30% after a weak fourth-quarter revenue forecast and a warning of negative cash flow for the…
- The drop triggered a global chip selloff, with Nvidia and AMD among the stocks that declined.
- Intel said a plant explosion in Israel will cost it about $600 million in revenue.
Intel shares plunged about 30% after the US chipmaker forecast weak fourth-quarter revenue and warned that its cash flow would be negative for the year. The fall wiped roughly $12 billion from the value of the United States government's stake in the company.
The warning sparked a wider sell-off in chip stocks around the world. Nvidia and AMD were among the companies whose shares also declined.
Intel attributed part of the problem to a fabrication plant in Israel. A disruption at the facility, which included an explosion, led to an extended shutdown. Intel estimated the lost revenue from the plant at about $600 million.
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Weak PC demand and rising costs
Demand for PCs has softened, and the company's revenue projections reflect that pressure.
Intel's problems also link to the rapid growth of artificial intelligence. The AI industry is taking up large amounts of memory and other components. That demand has pushed up the prices of PCs, which may reduce how many people buy them.
The company's forecast fell short of what investors had expected, which hit the stock hard. The fall was among the steepest Intel has seen in decades.
What comes next
Intel has not said when the Israel plant will resume full production. It is not yet known how long the weaker PC market will last or how far the chip sell-off will spread.
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