The company reported dismal quarterly and full-year results Friday, leading Intel shares to fall as much as 10%. Analysts and investors alike were surprised by the chipmaker’s tepid quarterly numbers, which included a 32% decline in revenue and a net loss of $664 million.
A surfeit of chips and a weakening demand for factories are likely to pressure Intel’s margins in the upcoming quarter, with the company guiding to a net loss of 15 cents per share adjusted for the quarter.
There were no minced words among analysts, who cut price targets nearly everywhere.
In a note published Thursday evening, Rosenblatt analyst Hans Mosesmann wrote, “There are no words to describe or explain Intel’s historic collapse, which management is blaming a worst-ever PC inventory digestion dynamic and macro/China/enterprise for the over 20% decline in sales.
Intel’s price target has been lowered from $20 to $17 by Rosenblatt, who maintains a sell rating.
As Intel CEO Pat Gelsinger, who took over in 2021 from its 54-year-old predecessor, this will be a significant test. A slowing PC market has pressured Intel’s margins and forced retailers to “correct” their inventories, Gelsinger told analysts in a call. The inventory and production issues are the result of factors outside Intel’s control.
“We know the trend will reverse, but predicting when is difficult,” Intel’s CEO told analysts. Intel shares are down over 42% from their 52-week high.