Intel Shares Freefall As American Chipmaking Giant Careens Toward Worst Day Ever

Forbes Business Breaking Intel Shares Freefall As American Chipmaking Giant Careens Toward Worst Day Ever Robert Hart Forbes Staff Robert Hart is a London-based Forbes senior reporter. Following Aug 2, 2024, 11:56am EDT Share to Facebook Share to Twitter Share to Linkedin Topline Intel is on track to erase more than $30 billion in market
Intel Shares Freefall As American Chipmaking Giant Careens Toward Worst Day Ever

Intel Shares Freefall As American Chipmaking Giant Careens Toward Worst Day Ever

Following

Topline

Intel is on track to erase more than $30 billion in market value in one of its worst days since going public decades ago, part of a broader selloff as tech titans release lackluster earnings reports amid growing investor skepticism as to whether big tech’s hefty investments in AI can pay off.

Key Facts

Intel shares fell nearly 30% on Friday morning after the company announced plans to slash its workforce and halt its dividend, as well as issuing grim revenue forecasts for the months ahead.

The deep cuts, brutal earnings report and ensuing stock firesale has put Intel on track for what could become its worst day since going public in 1980 and its shares have only fallen more than 19% a handful of times in that period.

If sustained, the plunge means Intel is poised to erase around $35 billion in market value on Friday alone, shrinking from around $124 billion to $89 billion.

Intel had a market value of around $500 billion at its peak in the middle of 2000, after which the firm nosedived as part of the dot-com bust and has not come close to reaching the mark since.

If losses hold until the bell, Intel will be worth just a fraction of the market value of semiconductor rivals it has fought with and bested for decades before falling behind in recent years.

As it stands today, Intel would be worth less than 5% of chipmaking behemoth Nvidia and less than half—around 40%—of Advanced Micro Devices (AMD), which have market values of around $2.5 trillion and $216 billion, respectively.


Is This The End For Intel?

For decades, Intel has been one of the most important companies in the United States and for a long time it was the country’s biggest and most valuable chip company. Intel was a pioneer in one of the most consequential technologies in the history of humanity: microprocessors. The technology powers computers and was one of the keys to igniting the digital revolution. While Intel remains an important player in the field and its chips still power countless devices, its failure to anticipate the mobile chip boom that accompanied the release of the iPhone and its inability to keep up during the recent AI race means the company has fallen behind rivals it had trounced for years like Nvidia and AMD. Its performance has been almost the complete antithesis of market leader Nvidia this year, falling to become one of the worst performers of the S&P 500 compared to Nvidia’s position as one of the best. Even before Friday’s crash, this series of failures has increasingly led to questions over whether Intel can possibly recover and stay relevant in today’s market. Analysts have described Friday’s nosedive as a “spiral” or a potentially “existential” moment for the firm, though one that Intel is likely to survive in some shape or form. However, analysts said it is largely unclear how Intel might look in the future and whether its deep cuts will help it return as a revitalized competitor in the semiconductor space.

Tangent

Intel’s downward spiral dragged down chip and tech stocks Friday, compounding selloffs amid growing over the value of heavy AI investments and dismal earnings reports from giants like Amazon and Microsoft. The chip selloff triggered heavy losses among chip companies around the world, including South Korea’s Samsung and SK Hynix (which suffered its worst daily drop in more than a decade), Japan’s Tokyo Electron, Taiwan’s TMSC, the Netherlands’ ASML and Britain’s Arm Holdings. U.S. firms also fell, with Nvidia plunging nearly 6% shortly after markets opened Friday, having already closed nearly 7% down Thursday. Other American firms like Broadcom, KLA Corp, Qualcomm, Lam Research, Applied Materials and Marvell also dipped between 2% and 4% during trading on Friday morning.

Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you’ll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.

Further Reading

ForbesIntel’s 29% Nosedive Leads Massive Global Chip Stock Selloff As AI Hype Sours ForbesWhat AI Is The Best? Chatbot Arena Relies On Millions Of Human Votes

Follow me on  Twitter or  LinkedInSend me a secure  tip
Total
0
Shares
Leave a Reply
Related Posts
Former Home Secretary Priti Patel announces she is standing for the Tory leadership as she becomes the fifth candidate to officially enter the race
Read More

Former Home Secretary Priti Patel announces she is standing for the Tory leadership as she becomes the fifth candidate to officially enter the race

Priti Patel has entered the race to be Tory leader, saying her party should put 'unity before personal vendetta'. Standing on a platform of 'unite to win', the former Home Secretary urged colleagues not to descend into 'a soap opera of finger-pointing and self-indulgence' in the wake of the landslide General Election defeat. Sources close to
Russia’s Putin offers disaster aid to North Korea to help it cope with recent flooding damage
Read More

Russia’s Putin offers disaster aid to North Korea to help it cope with recent flooding damage

Russian President Vladimir Putin has offered humanitarian assistance to help North Korea cope with damages from recent floods, in another sign of expanding relations between the two nations Russia’s Putin offers disaster aid to North Korea to help it cope with recent flooding damageBy HYUNG-JIN KIMAssociated PressThe Associated PressSEOUL, South Korea SEOUL, South Korea (AP)