Intel has worst day on Wall Street in 50 years, falls to lowest price in over a decade

Intel
shares
plunged
the
most
in
50
years
on
Friday,
reaching
a
price
not
seen
since
2013,
after
the
chipmaker
reported
a

big
earnings
miss
and
announced
a
massive
restructuring.

The
stock
plummeted
26%
to
$21.48
at
the
close.
It
was
the
second
worst
day
ever
for
the
shares,
behind
only
a
31%
drop
in
July
1974,
which
was
three
years
after
Intel’s
IPO.
The
company’s
market
cap
is
now
below
$100
billion.

The
dramatic
selloff
contributed
to
a
2.4%
drop
in
the
Nasdaq
and
pulled
down
global
semiconductor
stocks.


Taiwan
Semiconductor
Manufacturing
Co.
—
known
as
TSMC
—
closed
4.6%
lower
in
Taiwan,
and
Samsung
was
down
more
than
4%
at
the
end
of
the
session
in
South
Korea.
TSMC
is
the
world’s
biggest
manufacturer
of
chips,
while
Samsung
is
the

largest
memory
semiconductor
firm
globally.

Intel’s
numbers
were
bad
across
the
board.

The
company
swung
to
a
$1.61
billion
net
loss
after
reporting
net
income
of
$1.48
billion
in
the
year-earlier
period.
Adjusted
earnings
per
share
of
2
cents
fell
way
short
of
the
average
analyst
estimate
of
10
cents,
according
to
LSEG.
Revenue
also
missed
expectations.

Intel
said
it
won’t
pay
its
dividend
in
the
fiscal
fourth
quarter
of
2024
and
lowered
its
forecast
for
full-year
capital
expenditures
by
over
20%.
The
company
said
it would
lay
off
more
than
15%
of
its
employees
as
part
of
a
$10
billion
cost-reduction
plan.

“This
is
the
most
substantial
restructuring
of
Intel
since
the
memory
microprocessor
transition
four
decades
ago,”
Intel
CEO
Pat
Gelsinger
told
CNBC’s
Jon
Fortt
in
an
interview
that
aired
on
Friday.
“We
have
laid
out
an
audacious
journey
of
rebuilding
this
company,
and
we’re
going
to
get
that
done.”

A
decision
to
more
rapidly
produce
Core
Ultra
PC
chips
that
can
handle artificial
intelligence workloads
contributed
to
the
loss,
Gelsinger
said
on
a
conference
call
with
analysts.
The
company
said
pricing
was
more
competitive
than
planned
during
the
quarter,
as AMD, Qualcomm and
other
companies
have
been
working
to
take
market
share
from
Intel,
which
has
fallen
way
behind
its
rivals
in
the
AI
battle.

The
job
cuts
will
mainly
take
place
this
year,
Gelsinger
wrote
in
a memo.
It’s
the
largest
of
any
single
job
cut
listed
on
Layoffs.fyi,
an
industry
tracker
that’s
been
operating
since
March
2020.

Adding
pressure
to
the
chip
sector
is
a
report
from

The
Information
that
AI
chipmaker


Nvidia
is
the
subject
of
a
U.S.
Department
of
Justice
antitrust
investigation.

The
DOJ
is
looking
at
complaints
that
the
company
allegedly
abused
its
market
dominance
in
AI,
The
Information
reported.

In
response,
a
spokesperson
for
Nvidia
said
that
the
company
“wins
on
merit.”

“We
compete
based
on
decades
of
investment
and
innovation,
scrupulously
adhering
to
all
laws,
making
NVIDIA
openly
available
in
every
cloud
and
on-prem
for
every
enterprise,
and
ensuring
that
customers
can
choose
whatever
solution
is
best
for
them,”
the
spokesperson
said.

The
spokesperson
added
that
Nvidia
is
“happy
to
provide
any
information
regulators
need.”

CNBC
has
also
reached
out
to
the
DOJ
on
the
report.

Samsung
rival
SK
Hynix,
which
supplies
U.S.
giant
Nvidia,
also
fell
sharply
to
close
more
than
10%
lower.
The
sell-off
continued
in
Europe.
Shares
of


ASML,
which
sells
key
tools
required
to
make
cutting-edge
chips,
declined
along
with


STMicroelectronics
and


Infineon.

The
VanEck
Semiconductor
ETF,
which
includes
major
names
in
the
sector,
fell
5.5%
on
Friday
after
plummeting
6.5%
a
day
earlier.

WATCH:

Why
Intel
faces
a
challenging
road
ahead