Intel shares fell 29% on Friday, their worst day since the 1970s, after the chipmaker issued weaker-than-expected guidance. Intel attributed the outlook to a plant shutdown in Israel and continued softness in the PC market, according to CNBC.
Intel expects adjusted earnings of 25 cents per share for the current quarter, on revenue between $15 billion and $16 billion. Analysts had expected revenue of $17.1 billion and earnings of 43 cents per share, according to LSEG. Intel finance chief David Zinsner said, "We see the PC slowdown continuing at least through the first half of next year."
Intel said an explosion at a fab in Israel earlier this month will cost about $600 million in lost revenue over two quarters, Zinsner said. CEO Lip-Bu Tan called the explosion an "unfortunate and tragic accident" that caused an "extended shutdown" at the plant, affecting shipments of 10-nanometer chips.
The report says the U.S. government's roughly 10% stake in Intel lost about $12 billion in value on Friday. Nvidia's stake fell about $6 billion. Analysts at D.A. Davidson downgraded Intel to neutral from buy, writing that it is "hard to justify the current multiple when weakness is so significant."
Intel shares had risen about 150% this year before Thursday's earnings report. The Nasdaq Composite fell 2.9% on Friday. Nvidia dropped 4%, Broadcom fell more than 5%, and Qualcomm tumbled 11%.