Intel Corp. (INTC)

Intel Corp. (INTC) stock experienced a 5.16% decline following a report by The Wall Street Journal that China is ordering its largest telecommunications carriers to cease the use of foreign chips. Chinese officials issued the directive earlier this year, requiring the replacement of non-Chinese core processors by 2027. The report indicated that this mandate would impact Intel. China accounted for 27% of Intel’s revenue in 2023, making it the company’s largest market. The reliance of the company on the Chinese market underscores the continued importance of China, despite U.S. regulations aimed at curbing chip exports and China's efforts to reduce its dependency on foreign technology. In October 2022, the U.S. implemented rules to limit China’s access to advanced American chips, particularly those critical to artificial intelligence technology. China responded by setting guidelines in December to remove U.S. chips from government computers and servers. Despite these measures, Intel reportedly survived a push by AMD to end its sale of laptop chips to the U.S.-sanctioned Chinese telecom company Huawei.

Intel Corp. (INTC) witnessed an 8.22% decline in its stock value following the company's release of long-awaited financials for its semiconductor manufacturing, or foundry, business. Here are the key details:

• Financial Disclosure Impact: This decline stemmed from the revelation of a substantial operating loss of $7 billion in 2023 for the foundry arm, marking the first time Intel had reported revenue totals for this segment separately from its products business. This disclosure caused Intel shares to close down 8% on Wednesday, in contrast to the products business, which reported $11.3 billion in operating income in 2023. Intel expects its foundry losses to peak in 2024 and achieve break-even halfway between the current quarter and the end of 2030.
• Intel's Business Restructuring and Future Goals: Intel's disclosure of worse-than-expected financials for its nascent foundry business led to skepticism among Wall Street analysts regarding the unit's near-term prospects. The company's executives detailed a division of operations into two main businesses: one selling finished products and the other providing chipmaking services. Currently, Intel Foundry receives 95% of its business from the Intel Products unit. Despite the challenges, Intel has set a goal to become the No. 2 contract chipmaker worldwide, behind Taiwan Semiconductor Manufacturing (TSM).
• Intel Foundry's Financial Performance:
  Analysts were surprised by Intel Foundry's deepening losses, with the manufacturing business posting a $7 billion operating loss for 2023, compared to a $5.2 billion operating loss the year before. The unit's revenue in 2023 was $18.9 billion, down 31% from $27.5 billion in 2022. Chief Executive Pat Gelsinger stated that operating losses for the foundry business are expected to peak in 2024, with the unit projected to break even on an operating basis by about 2027.

Intel Corp. (INTC) stock plunged by 11.91% due to its Q4 financial report. Although Intel surpassed sales and earnings expectations for the fourth quarter, the company's forward guidance has raised concerns among investors.

• Q4 Performance and Concerns: Intel's fourth-quarter report, released after the market closed, revealed non-GAAP (adjusted) earnings per share of $0.54 on revenue of $15.4 billion. This performance exceeded market expectations, with sales showing a 10% year-over-year increase, and earnings up by 260% compared to the previous year. Analysts had predicted per-share earnings of $0.45 on sales of $15.15 billion. However, the company's forward guidance overshadowed these strong results, causing apprehension on Wall Street.
• Forward Guidance Impact: For the first quarter, Intel's guidance forecasts adjusted per-share earnings of $0.13 on revenue ranging between $12.2 billion and $13.2 billion. This guidance fell significantly short of analysts' expectations, who had anticipated per-share earnings of $0.33 and revenue of $14.15 billion. The substantial disparity between projected Q1 performance and market expectations led to a notably negative market reaction. In short, Intel has achieved substantial gains thanks to improvements in business performance, government support for its foundry business, and enthusiasm surrounding opportunities in artificial intelligence. However, investors may need to manage their expectations, as Intel's guidance suggests that the company is not yet benefiting significantly from the AI sector. While Intel is in the early stages of executing its AI strategy, its business has not experienced a substantial boost yet. The company's guidance indicates that first-quarter sales are expected to increase by only 4% compared to the $11.7 billion in revenue it reported for Q1 2023.

Shares of Intel Corporation (INTC) dropped by 5.09% from $34.59 to $32.83 in the trading on Wednesday, October 25, 2023. The reason why INTC stock down today is due to Texas Instruments' (TXN) recent third-quarter results, which missed sales forecasts and included guidance that fell short of market expectations. While Intel and Texas Instruments are not direct competitors, they share some overlapping customers. The semiconductor industry as a whole has been experiencing a downturn, and Texas Instruments' caution about worsening demand across various sectors raised concerns about Intel's future prospects, contributing to the decline in Intel's stock price.

Intel (INTC) stock dropped 3.57% after scrapping a $5.4 billion deal to acquire Israeli chipmaker Tower Semiconductor (TSEM -10.69%) due to regulatory issues in China. The move comes with a $353 million termination fee. Despite the setback, Intel aims to maintain its performance goals and potentially collaborate with Tower in the future.

https://www.fool.com/investing/2023/08/16/why-intel-stock-wilted-on-wednesday/

Intel's share fell 2.88% today when Intel's data center and AI segment revenue declined 15% YoY in Q2, showing improvement from the 39% decline in Q1. Full recovery will take time.

https://www.fool.com/investing/2023/07/31/intels-data-center-downturn-drags-on/