Intel Stock Plummets 28.5% on Wall Street, Worst Day Since 1974 Possible
Translated & summarized from Ynet by baba
Intel's stock plunged nearly 29% on Wall Street Friday, potentially marking its worst trading day since 1974, after issuing a weak fourth-quarter forecast. The company cited a prolonged slowdown in the PC market and a $600 million revenue hit from an Israeli factory explosion. Despite strong third-quarter results, the bleak outlook overshadowed positive performance in data center and AI operations.
The story in 5 lines · by baba
- Intel stock dropped 28.5% on Wall Street, potentially its worst day since 1974.
- The company issued a weak fourth-quarter forecast, projecting lower revenues and earnings.
- An explosion at an Intel factory in Israel is expected to cost the company $600 million.
- Intel anticipates a slowdown in the PC market to continue until mid-2027.
- Major tech stocks and indices also experienced significant declines on Friday.
Intel's stock experienced a dramatic drop of approximately 28.5% on Wall Street Friday, trading at $65.83 and wiping out about $139 billion in market value. This sharp decline follows a weak financial forecast for the fourth quarter. The tech giant's stock performance could mark its worst day since 1974 if the trend holds until market close.
Despite exceeding expectations in the third quarter with a 21% revenue increase to $16.51 billion and adjusted earnings per share of 52 cents, Intel's outlook for the fourth quarter was significantly lower than anticipated. The company projected revenues between $15 billion and $16 billion, compared to the market's expectation of $17.1 billion, and adjusted earnings of 25 cents per share against analysts' prediction of 43 cents.
Intel's CEO, Lip-Bu Tan, attributed the projected slowdown in the personal computer market to persist until the first half of 2027, citing rising memory chip prices. Additionally, a recent explosion at an Intel factory in Israel, which resulted in two fatalities, is expected to reduce revenues by approximately $600 million over two quarters.
Chief Financial Officer David Zinsner stated that the company does not anticipate generating positive cash flow this year. The broader tech sector also saw declines, with Broadcom down 3.98%, Nvidia 3.15%, Tesla 2.94%, Amazon 2.77%, and Microsoft 2.71%. Major indices also fell, with the Nasdaq down 2.25%, the S&P 500 down 1.19%, and the Dow Jones down 0.36%.
Among Israeli stocks trading in New York, Teva rose 1.46%, while Elbit Systems fell 1.99%. Nice, Wix, monday.com, and Check Point also saw decreases.
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