By Radarr Africa Business Desk
LAGOS, October 31 (Radarr Africa) – Intel shares fell about 29% on Friday, October 30, after the chipmaker issued a much weaker fourth-quarter forecast than analysts expected, pulling semiconductor stocks lower and helping send the Nasdaq Composite down 2.84%.
TheStreet’s market report, written by Rob Lenihan and Noah Weidner, called it Intel’s worst day since 1974. The stock moved between a loss of 25.57% in premarket trading and 30.22% at 1:36 p.m. Eastern Time. StockTitan, a market news site, put the fall at 28.32% at 11:00 a.m.
Intel reported after the close on October 29. Third-quarter revenue was $16.5 billion, StockTitan reported, with client computing revenue of $8.1 billion, down 5% from a year earlier, while data centre and AI revenue rose 78%.
The damage came from the outlook. Intel forecast fourth-quarter revenue of $15.0 billion to $16.0 billion, an adjusted gross margin of 38.0%, down from 44.1%, and adjusted earnings of $0.25 a share, down from $0.52. Analysts surveyed by LSEG, as reported by CNBC, had expected revenue of $17.1 billion and adjusted earnings of $0.43 a share, StockTitan said.
Chief financial officer David Zinsner said in the company’s release that Intel expects “the PC slowdown continuing at least through the first half of next year.” TheStreet attributed the weak outlook to a severe slump in personal computers and a factory accident in Israel.
The selling spread across the sector. TheStreet reported that the VanEck Semiconductor ETF fell 7.87%, Advanced Micro Devices dropped 12.02% and Nvidia lost 4.95%.
US indices closed lower. The Dow Jones Industrial Average ended at 51,785.82, down 1.06%. The S&P 500 closed at 7,578.97, down 1.83%, and the Nasdaq Composite at 25,442.31, down 2.84%, according to TheStreet. The Russell 2000 fell 2.03% to 2,801.16. Nearly 70% of US-listed issues declined, and the S&P 500 technology sector fell nearly 5%. The Cboe Volatility Index rose more than 32% intraday to about 22.75.
Amazon also weighed on sentiment. StockTitan reported that third-quarter net sales rose 12% to $201.9 billion and Amazon Web Services grew 39%, its fastest pace in nearly five years. Earnings of $1.89 a share compared with $1.96 expected by analysts polled by LSEG. Free cash flow over the 12 months to September was an outflow of $42.4 billion, which Amazon said mainly reflected AI investment. Amazon shares were down 1.81% at 11:00 a.m. after falling 7.14% before the open.
Daniela Hathorn, senior market analyst at Capital.com, said “strong AI demand is no longer enough on its own.” She said companies must show that heavy capital spending is producing sustainable revenue growth, margins and free cash flow, and warned this could be a significant headwind for the Nasdaq given how concentrated market gains are in a few technology companies.
TheStreet also reported that Reddit fell 29% and Alphabet dropped 12.61% over the week. The market wrap did not give details on Amazon’s results; the figures above come from StockTitan.
