Intel stock has worst day since 1970s, wiping about $12 billion off government's stake — SkimNews
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- Intel shares dropped 29% on Friday, their worst single-day decline 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, below the $17.1 billion analysts anticipated, with adjusted EPS forecast at 25 cents versus the expected 43 cents, according to LSEG.
- Intel plant explosion in Israel earlier this month killed two workers, injured a third, and will cost the company $600 million in lost revenue over two quarters, impacting 10-nanometer chip shipments.
- U.S. government saw the value of its 10% stake in Intel drop by approximately $12 billion on Friday, though the investment remains profitable despite the sharp market correction.
- Nvidia lost about $6 billion in value from its stake in Intel, while its own stock fell 4% amid broader semiconductor sector declines following a week of weak tech earnings.
- David Zinsner, Intel’s finance chief, stated the PC slowdown will continue at least through the first half of next year, with global PC shipments down 4% year-over-year in Q2 per Counterpoint Research.
- Lip-Bu Tan, Intel’s CEO, acknowledged the Israel plant’s extended shutdown but emphasized progress on the 14A chip and said a couple of external foundry customers would be announced in the next two quarters.
Why it matters: The $12 billion loss in the U.S. government’s Intel stake underscores the financial risk of public bets on corporate turnarounds, especially as Intel still lacks external customers for its advanced chips despite heavy investment and national strategic importance in domestic semiconductor manufacturing.
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