Intel Shares Plummet Amid Deepening Turnaround Struggles

Intel set for biggest slide in 24 years as turnaround struggle deepens

"Intel's issues are now approaching the existential in our view," Bernstein analyst Stacy Rasgon said. He said there would be "going concern" talks in other circumstances, but Intel could add $40 billion in cash to its balance sheet by the end of 2025 through the moves, as well as subsidies and partner contributions. "Intel will survive (in some form) to continue the fight," Rasgon said. Shares of other chip firms also fell, with Arm, Micron Technology, GlobalFoundries and U.S.-listed shares of TSMC trading down between 2% and 5.1%. Wall Street darling Nvidia was 4% lower after a report about an investigation by the U.S. Department of Justice. Santa Clara-based Intel was once the world's leading chipmaker, with the "Intel Inside" logo a valuable marketing feature on personal computers in the 1980s and 90s. Part of the dotcom era's Four Horsemen - along with Cisco Systems, Microsoft and Dell - Intel's stock market value peaked at nearly $500 billion in 2000 before slumping that year and never fully recovering. It continued to dominate in hefty PC chips, but was caught off foot by the launch of Apple's iPhone in 2007 and other mobile devices that demanded lower power and less pricey processors. If Friday's losses hold, Intel's market value would fall to about $100 billion, equivalent to less than 5% of Nvidia's and about 40% of Advanced Micro Devices', the two PC chipmakers it heavily dominated for decades until recently. The selloff was also set to leave Intel worth less than Applied Materials and Lam Research, companies that supply equipment for Intel's fabrication plants. "Eliminating the dividend may pressure the share price because it will knock Intel out of any ETFs, indices and fund strategies that only include dividend payers," said Michael Schulman, chief investment officer of Running Point Capital. "Intel has been one of the forgotten horsemen of technology the last couple decades. Never overtaking its year 2000 highs and struggling to get earnings back to where they were before the AI revolution." Its server chip business has been taking a hit for several years as companies prioritize spending on AI chips, where it lags rival Nvidia, which has become one of the world's most valuable firms thanks to booming demand for its processors. To regain its manufacturing edge, Intel is planning to spend $100 billion across four U.S. states to build and expand factories after securing $19.5 billion in federal grants and loans. Its turnaround plan depends on persuading outside companies to use its manufacturing services. But analysts say the push to energize contracting foundry business could take years. For now, it is increasing Intel's costs and pressuring profit margins. At least 12 analysts lowered their price target on Intel's stock after the results, pushing down the median PT to $31. Its shares were at $23.04 in premarket trading. The stock has a 12-month forward price-to-earnings ratio of 18.62, compared with Nvidia's 32.15 and AMD's 29.42. (Reporting by Noel Randewich in Oakland, California, and Aditya Soni in Bengaluru; Additional reporting by Arsheeya Bajwa in Bangalore; Editing by Mrigank Dhaniwala and Arun Koyyur)

Intel shares slump 28% as turnaround struggle deepens

"Intel's issues are now approaching the existential in our view," Bernstein analyst Stacy Rasgon said. He said there would be "going concern" talks in other circumstances, but Intel could add $40 billion in cash to its balance sheet by the end of 2025 through the moves, as well as subsidies and partner contributions. "Intel will survive (in some form) to continue the fight," Rasgon said. Shares of other chip firms also fell, with Arm, Micron Technology, GlobalFoundries and U.S.-listed shares of TSMC trading down between 2.8% and 6.7%. Wall Street darling Nvidia was 2% lower after a report about an investigation by the U.S. Department of Justice. Santa Clara-based Intel was once the world's leading chipmaker, with the "Intel Inside" logo a valuable marketing feature on personal computers in the 1980s and 90s. Part of the dotcom era's Four Horsemen - along with Cisco Systems, Microsoft and Dell - Intel's stock market value peaked at nearly $500 billion in 2000 before slumping that year and never fully recovering. It continued to dominate in hefty PC chips, but was caught off foot by the launch of Apple's iPhone in 2007 and other mobile devices that demanded lower power and less pricey processors. If Friday's losses hold, Intel's market value would fall to about $90 billion, equivalent to less than 5% of Nvidia's and about 40% of Advanced Micro Devices', the two PC chipmakers it heavily dominated for decades until recently. "Eliminating the dividend may pressure the share price because it will knock Intel out of any ETFs, indices and fund strategies that only include dividend payers," said Michael Schulman, chief investment officer of Running Point Capital. "Intel has been one of the forgotten horsemen of technology the last couple decades. Never overtaking its year 2000 highs and struggling to get earnings back to where they were before the AI revolution." Its server chip business has been taking a hit for several years as companies prioritize spending on AI chips, where it lags rival Nvidia, which has become one of the world's most valuable firms thanks to booming demand for its processors. To regain its manufacturing edge, Intel is planning to spend $100 billion across four U.S. states to build and expand factories after securing $19.5 billion in federal grants and loans. The company told investors on Thursday it remains "comfortable" with those CHIPS program plans. The company's turnaround plan depends on persuading outside companies to use its manufacturing services. But analysts say the push to energize the business could take years. For now, it is increasing Intel's costs and pressuring profit margins. Intel's unesecured bond that offers a coupon of 5.15% and is due in 2024 was trading 20 basis points wider on Friday, way above bonds of other companies, according to investors. Its 5.6% unsecured bonds due in 2054 also widened by 17 basis points. The higher trading volume compared to other bonds was due to Intel's recent earnings report, bond market participants said. "That's weighing on bond trading," said Dave Novosel, senior investment analyst at corporate bond research firm Gimme Credit. "They see that they may need to come back to market for a modest amount of debt." At least 14 analysts lowered their price target on Intel's stock, pushing down the median PT to $28. Its shares were trading at a more than 11-year low of $20.6 on Friday. The stock has a 12-month forward price-to-earnings ratio of 18.62, compared with Nvidia's 32.15 and AMD's 29.42. (This story has been corrected to remove reference to record slump in the headline and to say that the stock is on track for the worst day since 1974, not the worst day ever, in paragraph 1) (Reporting by Noel Randewich in Oakland, California, and Aditya Soni in Bengaluru; Additional reporting by Matt Tracy in New York and Arsheeya Bajwa in Bangalore; Editing by Arun Koyyur)

Intel shares slump 26% as turnaround struggle deepens

The company lost more than $30 billion in market value after it gave a disappointing forecast and said it would cut 15% of its workforce, deepening worries about its ability to catch up with Taiwan's TSMC and other chipmakers. "Intel's issues are now approaching the existential in our view," Bernstein analyst Stacy Rasgon said. Rasgon said Intel could add $40 billion in cash to its balance sheet by the end of 2025 through the moves, as well as subsidies and partner contributions. While Intel's manufacturing setbacks are specific to the Santa Clara, California-based company, other chipmakers also sank for a second straight day. Weak employment numbers on Friday caused a sharp increase in worries about a slowdown in the U.S. economy, leading traders to bet that the U.S. Federal Reserve will deliver a big half-percentage-point rate cut in September, instead of a 25-bp cut expected before the data. "The excitement over AI and large cap technology is coming back to earth. The future is still bright, but the truth is investors got a tad too excited and once again, we see when everyone gets on one side of the boat what can happen," said Ryan Detrick, chief market strategist at The Carson Group. Companies selling equipment used in factories run by Intel and other manufacturers fell sharply, signaling investor concerns about the pace of future investments in manufacturing infrastructure. Applied Materials, ASML Holding and KLA Corp all dropped around 8%. The PHLX chip index sank 5.2%, bringing its loss this week to almost 10%. Nvidia dropped almost 2%, with the dominant seller of AI processors down over 20% from its record high close on June 18. Heightened worries about a recession, along with quarterly reports from Amazon and Alphabet that failed to impress Wall Street, have fueled doubts about the future pace of investment in AI, said Ross Mayfield, an investment strategy analyst at Baird. "There's a broader question of whether this AI capex can continue basically vertical or exponential growth, especially if the macro backdrop is softening," Mayfield said. Intel was once the world's leading chipmaker, with the "Intel Inside" logo a valuable marketing feature on personal computers in the 1980s and 1990s. Part of the dotcom era's Four Horsemen - along with Cisco Systems, Microsoft and Dell - Intel's stock market value peaked at nearly $500 billion in 2000 before slumping that year and never recovering. It continued to dominate in brawny PC chips, but was caught off-guard by the launch of Apple's iPhone in 2007 and other mobile devices that demanded lower power and less pricey processors. Now valued at about $91 billion, Intel is worth less than 5% of Nvidia and about 40% of Advanced Micro Devices', two PC chipmakers it loomed over for decades until recently. "Intel has been one of the forgotten horsemen of technology the last couple decades - never overtaking its year 2000 highs and struggling to get earnings back to where they were before the AI revolution," said Michael Schulman, chief investment officer of Running Point Capital. Its server chip business has been taking a hit for several years as companies prioritize spending on AI chips, where it lags Nvidia, which has become one of the world's most valuable firms thanks to booming demand for its processors. To regain its manufacturing edge, Intel plans to spend $100 billion across four U.S. states to build and expand factories after securing $19.5 billion in federal grants and loans. The company told investors on Thursday it remains "comfortable" with those CHIPS program plans. Intel's turnaround plan depends on persuading outside companies to use its manufacturing services. But analysts said the push to energize the business could take years. For now, it is increasing Intel's costs and pressuring profit margins. Intel's unsecured bond that offers a coupon of 5.15% and is due in 2024 was trading 20 basis points wider on Friday, way above bonds of other companies, according to investors. Its 5.6% unsecured bonds due in 2054 also widened by 17 basis points. The higher trading volume compared to other bonds was due to Intel's recent earnings report, bond market participants said. "That's weighing on bond trading," said Dave Novosel, senior investment analyst at corporate bond research firm Gimme Credit. "They see that they may need to come back to market for a modest amount of debt." (Reporting by Noel Randewich in Oakland, California, and by Arsheeya Bajwa and Aditya Soni in Bengaluru; Additional reporting by Matt Tracy in New York and Arsheeya Bajwa in Bangalore; Editing by Arun Koyyur, Will Dunham and David Gregorio)

Intel shares slump 27% as turnaround struggle deepens

"Intel's issues are now approaching the existential in our view," Bernstein analyst Stacy Rasgon said. Rasgon said Intel could add $40 billion in cash to its balance sheet by the end of 2025 through the moves, as well as subsidies and partner contributions. While Intel's manufacturing setbacks are specific to the Santa Clara, California-based company, other chipmakers also sank for a second straight day. Weak employment numbers out on Friday caused a sharp increase in worries about a slowdown in the U.S. economy, leading traders to bet that the U.S. Federal Reserve will deliver a big half-percentage-point rate cut in September, instead of a 25-bp cut expected before the data. Companies selling equipment used in factories run by Intel and other manufacturers were down sharply, signaling investor concerns about the pace of future investments in manufacturing infrastructure. Applied Materials, ASML Holding and KLA Corp all dropped around 8%. The PHLX chip index sank almost 6%, bringing its loss in the past two days to almost 13%. Nvidia dropped more than 3%, with the dominant seller of AI processors down almost 7% this week. Intel was once the world's leading chipmaker, with the "Intel Inside" logo a valuable marketing feature on personal computers in the 1980s and 1990s. Part of the dotcom era's Four Horsemen - along with Cisco Systems, Microsoft and Dell - Intel's stock market value peaked at nearly $500 billion in 2000 before slumping that year and never fully recovering. It continued to dominate in hefty PC chips, but was caught off-guard by the launch of Apple's iPhone in 2007 and other mobile devices that demanded lower power and less pricey processors. If Friday's losses hold, Intel's market value would fall to about $90 billion, equivalent to less than 5% of Nvidia's and about 40% of Advanced Micro Devices', two PC chipmakers it heavily dominated for decades until recently. "Intel has been one of the forgotten horsemen of technology the last couple decades - never overtaking its year 2000 highs and struggling to get earnings back to where they were before the AI revolution," said Michael Schulman, chief investment officer of Running Point Capital. Its server chip business has been taking a hit for several years as companies prioritize spending on AI chips, where it lags rival Nvidia, which has become one of the world's most valuable firms thanks to booming demand for its processors. To regain its manufacturing edge, Intel plans to spend $100 billion across four U.S. states to build and expand factories after securing $19.5 billion in federal grants and loans. The company told investors on Thursday it remains "comfortable" with those CHIPS program plans. The company's turnaround plan depends on persuading outside companies to use its manufacturing services. But analysts said the push to energize the business could take years. For now, it is increasing Intel's costs and pressuring profit margins. Intel's unsecured bond that offers a coupon of 5.15% and is due in 2024 was trading 20 basis points wider on Friday, way above bonds of other companies, according to investors. Its 5.6% unsecured bonds due in 2054 also widened by 17 basis points. The higher trading volume compared to other bonds was due to Intel's recent earnings report, bond market participants said. "That's weighing on bond trading," said Dave Novosel, senior investment analyst at corporate bond research firm Gimme Credit. "They see that they may need to come back to market for a modest amount of debt." (Reporting by Noel Randewich in Oakland, California, and Aditya Soni in Bengaluru; Additional reporting by Matt Tracy in New York and Arsheeya Bajwa in Bangalore; Editing by Arun Koyyur and Will Dunham)

Intel shares set to fall most in 24 years as it struggles with turnaround

The Santa Clara company was once the world's leading chipmaker, with the "Intel Inside" logo a valuable marketing feature on personal computers in the 1980s and 90s. Part of the dot-com era's Four Horsemen - along with Cisco Systems, Microsoft and Dell - Intel's stock market value peaked at nearly $500 billion in 2000 before slumping in that year's market selloff and never fully recovering. It continued to dominate in hefty PC chips, but was caught off foot by the launch of Apple's iPhone in 2007 and other mobile devices that demanded lower power and less pricey processors. If Friday's losses hold, Intel's market capitalization would fall to about $100 billion, equivalent to less than 5% of Nvidia's and about 40% of Advanced Micro Devices', the two PC chipmakers it heavily dominated for decades until recently. The selloff was also set to leave Intel worth less than Applied Materials and Lam Research, companies that supply equipment for Intel's fabrication plants. "Intel has been one of the forgotten horsemen of technology the last couple decades," Michael Schulman, chief investment officer of Running Point Capital said. "Never overtaking its year 2000 highs and struggling to get earnings back to where they were before the AI revolution." (Reporting by Noel Randewich in Oakland, California; Additional reporting by Arsheeya Bajwa in Bangalore; Editing by Mrigank Dhaniwala)

Intel shares set to fall most in 24 years as it struggles with turnaround

Aug 2 (Reuters) - Intel was set to erase nearly $25 billion in market value on Friday in what would be its worst selloff since 2000 after it suspended its dividend and slashed its workforce to fund a costly turnaround for its chip-making business. Shares of the company were down about 20% in premarket trading after Intel late on Thursday forecast quarterly revenue below estimates and said it was cutting 15% of its workforce, raising worries about its ability to catch up to Taiwan's TSMC and other chipmakers it has fallen behind in recent years. The Santa Clara company was once the world's leading chipmaker, with the "Intel Inside" logo a valuable marketing feature on personal computers in the 1980s and 90s. Part of the dot-com era's Four Horsemen - along with Cisco Systems, Microsoft and Dell - Intel's stock market value peaked at nearly $500 billion in 2000 before slumping in that year's market selloff and never fully recovering. It continued to dominate in hefty PC chips, but was caught off foot by the launch of Apple's iPhone in 2007 and other mobile devices that demanded lower power and less pricey processors. If Friday's losses hold, Intel's market capitalization would fall to about $100 billion, equivalent to less than 5% of Nvidia's and about 40% of Advanced Micro Devices' , the two PC chipmakers it heavily dominated for decades until recently. The selloff was also set to leave Intel worth less than Applied Materials and Lam Research, companies that supply equipment for Intel's fabrication plants. "Intel has been one of the forgotten horsemen of technology the last couple decades," Michael Schulman, chief investment officer of Running Point Capital said. "Never overtaking its year 2000 highs and struggling to get earnings back to where they were before the AI revolution." (Reporting by Noel Randewich in Oakland, California; Additional reporting by Arsheeya Bajwa in Bangalore; Editing by Mrigank Dhaniwala)

Intel crashes 28%, most in over 40 years - Times of India

Intel shares suffered their largest decline in over 40 years after the company gave a grim growth forecast and laid out plans to slash 15,000 jobs, signalling that the chipmaker is ill-equipped to compete in the AI era. The shares fell more than 28 per cent after trading opened in New York on Friday, wiping out about $32 billion in market value. This marks the stock's biggest intraday drop since since at least 1982.Sales for the current quarter will be $12.5-13.5 billion, the company said on Thursday. Analysts had projected $14.4 billion on average. Competitors who specialise in AI are winning over some of Intel's customers. Nvidia now has more than twice its former nemesis' quarterly sales. Once a struggling rival, AMD is valued more than $100 billion higher by investors and Taiwan Semiconductor Manufacturing Co is widely recognised as having the industry's best production.