Intel Stock Drops 29% on Israel Plant Blast, Weak Guidance — SkimNews
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- Intel shares dropped 29% on Friday, their worst day since the 1970s, after issuing weaker-than-expected guidance due to a plant shutdown in Israel and ongoing PC market softness.
- Intel expects Q3 revenue of $15 billion to $16 billion and adjusted EPS of 25 cents, falling short of analyst expectations of $17.1 billion and 43 cents, respectively.
- U.S. government stake in Intel lost about $12 billion in value after the stock plunge, following its 10% investment over a year ago under the Trump administration.
- Nvidia lost about $6 billion in value from its stake in Intel, while its own stock fell 4% amid broader semiconductor declines.
- David Zinsner, Intel’s finance chief, said the Israel fab explosion will cost the company $600 million in lost revenue over two quarters and disrupt 10-nanometer chip shipments.
- Lip-Bu Tan, Intel’s CEO, acknowledged the plant shutdown as an 'unfortunate and tragic accident' and emphasized progress on 14A chips despite foundry challenges.
- D.A. Davidson downgraded Intel to neutral from buy, citing difficulty justifying the stock’s valuation given the severity of the PC market weakness.
Why it matters: The $12 billion loss in the U.S. government’s stake underscores the financial risk of national bets on semiconductor revival, while Intel’s failure to secure external foundry customers despite advanced production raises doubts about its ability to capitalize on its strategic position.
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