Intel warns of weak PC demand, shares tumble nearly 30%
Intel said a slowdown in personal-computer sales could limit its fourth-quarter earnings, prompting semiconductor stocks to plunge on October 31, with the chipmaker’s shares falling nearly 30% in the session. Reuters reported that on October 29 Intel warned of weaker demand, higher cash burn and a $600 million revenue hit from an explosion at its Fab 28 plant in Kiryat Gat, Israel, sending its stock down 23% in after-hours trading. The Globe and Mail noted that the company projected fourth-quarter revenue of $15-$16 billion, below analysts’ expectations, citing the prolonged PC slowdown and the Israeli incident. BigGo Finance added that the blast would cost about $600 million in revenue across two quarters and cut the fourth-quarter gross margin by roughly two points, affecting 10-nanometer Xeon server chips.
The Globe and Mail observed that the warning sparked a broader sell-off in semiconductor and server stocks, with shares falling up to 30%. Yahoo Finance reported that the decline was Intel’s steepest since 1974. Investor’s Business Daily reported that the warning caused semiconductor stocks to fall across the market.
