Intel stock drops more than 10% following the severe consequences

January 30, 2023: -On Friday, Intel shares continued to decrease, dropping 10% in premarket trading, following the group’s dismal quarterly and full-year results.

The chipmaker’s tepid quarterly digits, with a 32% yearly revenue drop and a net loss of nearly $664 million for the fourth quarter of 2022, shocked analysts and investors.

Intel’s troubles, including a surfeit of chips and cutting demand for factories pressing on its border, are unlikely to abate soon, with the group guiding to an altered net loss of 15 cents per share for the upcoming quarter. Analysts did not comment, slashing the price targets almost all over the board.

“No words can show or explain the historic collapse of Intel, with management which attempts to blame a worst-ever PC inventory digestion dynamic and macro/China/enterprise to more than 20% q/q drop in sales,” Rosenblatt analyst Hans Mosesmann stated on a Thursday. Rosenblatt also maintained its sell prices for Intel and lowered its price target from $20 to $17.

Intel shares decreased almost 11% before the opening Friday.

It’s a huge test for Intel CEO Pat Gelsinger, who is taking the top job at the 54-year-old chip company in 2021.

Factors above Intel’s control have contributed to both the inventory and production issues, with a slowing PC market pressuring Intel’s margin and pushing retailers to “correct” their inventories, Gelsinger said in a call with critics.

“While we know this dynamic will rebound, predicting when is difficult,” the CEO told analysts. Intel’s stock is down around 42% from its 52-week high.