Intel disappoints the stock market with its business forecast: shares fall by 11 percent

Semiconductor giant Intel has disappointed Wall Street with its guidance for the current quarter. The share fell by almost 11 percent in after-hours trading on Thursday.

Intel expects revenue of between $12.2 billion and $13.2 billion for the current quarter. Analysts on average expected more than $14 billion. The forecast for adjusted earnings per share also fell well below expectations.

The forecast shows that Intel CEO Pat Gelsinger still has a lot of work to do in transforming the once-dominant chip company. Competition is not only fierce when it comes to data center technology. Gelsinger wants to turn the tide with new production processes for more efficient chips.

Profit of $2.7 billion

In the latest quarter, Intel increased revenue by ten percent year over year to $15.4 billion, slightly ahead of market expectations. The final result was a profit of $2.7 billion, after a loss of $700 million in the same quarter last year.

The development of individual divisions shows where the problems lie. With the recovery of the computer market, PC processor revenues rose by a third to $8.8 billion. Gelsinger assumes that sales of personal computers will rise again to around 300 million devices per year. Intel wants to boost sales with the concept of the ‘AI PC’, which is said to be particularly well designed for artificial intelligence applications.

However, in the data center technology sector, sales fell by ten percent to four billion dollars. That was below analysts’ expectations. Intel’s smaller rival AMD, among others, has been causing problems here lately. In addition, with the increasing use of artificial intelligence applications, semiconductor company Nvidia is emerging with its specially designed chips. (sda/dpa)