Intel shares drop 45% in October amid weak PC demand and foundry concerns

ME AI News, on November 3, Intel’s stock experienced a historic plunge, declining 45% for the month of October—the worst monthly performance in the company’s history. On the last trading day of October, the stock dropped 29% in a single day, marking its largest single-day decline since the 1970s, followed by an additional 8% drop on the first trading day of November. This decline was primarily triggered by a profit warning. Intel expects its revenue for this quarter to be $1 billion to $2 billion below analyst estimates, due to weak demand in the PC market and high costs for memory and other components. PC business still accounts for approximately half of the company’s revenue. Meanwhile, although Intel’s data center business continues to grow, insufficient capacity has forced the company to shift some production capacity at its Oregon facilities from the advanced 18A process to the Intel 3 process to increase server CPU supply. This adjustment has raised concerns about its capacity for advanced processes and its ability to deliver on foundry commitments. Harvard Business School professor David Yoffie warned that if Intel cannot provide sufficient capacity beyond its own needs, it will struggle to become a reliable foundry partner. Intel CEO Patrick Gelsinger stated that the company expects to announce several foundry customers over the next two quarters, and progress in customer acquisition will be critical to the transformation of its foundry business. D.A. Davidson downgraded Intel’s rating from Buy to Neutral, noting that although the PC market faces industry-wide pressures, the severity of the business weakness has made the current valuation unsustainable. Raymond James Chief Market Strategist Matt Orton, however, argued that this is not a “reckoning moment” for the AI industry, as fundamentals remain strong—but investors need to reassess their still-overweight positions in this sector. (Source: MLion)