Tech & AI
Intel tumbles after hours on a weak profit outlook
Intel beat third-quarter profit and revenue estimates, but its fourth-quarter profit forecast fell well short of analyst expectations. The shares tumbled 23.0% in after-hours trading.
Quick Read
- Intel shares tumbled 23.0% after hours on Thursday after a weak fourth-quarter profit forecast.
- Third-quarter profit and revenue both beat analyst estimates, but the outlook carried more weight.
- Analysts are split on the cause: weak PC demand from high memory costs, or limits on supply and capacity.
- After-hours moves can shrink or reverse once Friday's regular session opens.
What happened to Intel's shares?
Intel (Nasdaq: INTC) shares tumbled 23.0% in after-hours trading on Thursday, to $70.87. After-hours trading takes place after the regular session closes, with far fewer buyers and sellers. Prices can swing more.
Why it matters: The drop followed a weak regular session. The stock fell 3.6% to close at $92.07, down from $95.53 the day before. Intel lost $17 billion in market value during the session.
Why did the outlook matter more than the results?
Intel said third-quarter earnings per share, its profit divided by its shares, beat the consensus, the average analyst forecast. Revenue also topped estimates.
Guidance, the company's own forecast for the next quarter, told a different story. Intel's fourth-quarter adjusted profit forecast landed well below analyst expectations, and its revenue range sat below the estimate too.
Chief executive Lip-Bu Tan cited short-term pressures across the PC industry. He also pointed to "extraordinary demand" for the company's Xeon server chips.
What are analysts saying?
Patrick Moorhead, chief executive of Moor Insights & Strategy, called it a "good" quarter with a "very challenging guide." Gene Munster of Deepwater Asset Management said weak PC demand is the main problem, with high memory costs slowing sales.
Not everyone agrees on the cause. Futurum Group chief executive Daniel Newman said the weak outlook "isn't a demand issue" and is more about expanding capacity. Futurum strategist Shay Boloor noted that Tan named production yields, substrate shortages and an Israel factory shutdown as limits on shipments.
Boloor also said the timing is poor, with Advanced Micro Devices and Nvidia pushing deeper into server processors.
What comes next for the stock?
What’s next: The shares had a strong run before the report. A $1,000 stake bought a year ago was worth about $2,227 at Thursday's close. Even so, the stock sat 34.7% below its 52-week high of $140.94.
Late-session swings often narrow or reverse once the full market opens. Friday's regular session, which opens at 9:30 a.m. ET, may show how the wider market prices the outlook.
For readers
What it could mean for you: People who own Intel shares directly carry the full weight of this outlook, with no other holdings to offset it. The forecast covers the current quarter, so the supply limits Tan described could shape the stock in the months ahead. A direct stake could stay well below its value before the report if after-hours prices hold once regular trading resumes. Analysts disagree on whether the problem is PC demand or factory capacity. That question may color how shareholders read later updates.
Questions and answers
Why did Intel stock fall after earnings?
Intel forecast fourth-quarter adjusted earnings and revenue below analyst estimates. That outlook outweighed third-quarter results that beat expectations.
Did Intel beat third-quarter estimates?
Yes. The company reported third-quarter earnings per share and revenue above the consensus, the average analyst forecast.
What is holding back Intel's sales?
Tan cited short-term pressures across the PC industry. Futurum's Shay Boloor noted Tan also named production yields, substrate shortages and an Israel factory shutdown as limits on shipments.
The numbers
| Intel (INTC) price | $92.07 |
|---|---|
| Intel (INTC) change | −3.62% |
| Intel (INTC) market value | $460 billion |
| Intel (INTC) 52-week high | $140.94 |
| S&P 500 change | −0.30% |
| 10-year Treasury yield | 4.98% |
Thursday’s close
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