Intel shares plunge 22% after disappointing forecast

Intel shares have plunged by more than a fifth after the chipmaker issued a disappointing business forecast on Thursday, reported German news agency dpa.

The company is grappling with a slowdown in PC sales due to soaring memory prices, as well as supply chain problems affecting chips for data centres, where demand remains strong.

Intel forecast revenue of between US$15 billion and US$16 billion for the current quarter, below analysts’ expectations of around US$17 billion. Its forecast adjusted earnings per share of 25 cents also fell well short of the market expectation of 43 cents. The shares fell by around 22% in after-hours trading in the US.

Intel chief financial officer David Zinsner said the company had been seeing a slowdown in business for several weeks as high memory prices were discouraging consumers from buying computers. He said there would be no improvement at least through the first half of 2027.

Chief executive Lip-Bu Tan said the entire market was affected. Memory prices would remain a major problem throughout next year, he added. Intel expects the PC market to shrink by 10% in 2027, following a projected decline of 12% this year.

Memory prices have surged in recent months amid strong demand to expand data centres for artificial intelligence. Intel has also benefited from the AI boom through demand for its processors. However, the company has been unable to meet demand adequately, Tan said. Reasons included shortages of certain raw materials and the temporary closure of a factory in Israel.

Revenue in the most recent quarter rose 21% year-on-year to US$16.5 billion, broadly in line with analysts’ expectations. Net profit fell 18% to US$3.3 billion.