Intel’s ‘historic collapse’ triggers selloff in chip stocks

Five of the biggest U.S. chipmakers were set to erase nearly $15 billion in market value on Friday after Intel Corp stumped Wall Street with dismal earnings projections, fanning fears around a slump in the personal-computer market.

The company predicted a surprise loss for the first quarter and its revenue forecast was $3 billion below estimates as it also struggled with slowing growth in the data center business.

Intel shares fell 10% before the bell, with rival Advanced Micro Devices, Nvidia, Applied Materials and Qualcomm losing between 0.8% and 3.2%. Intel supplier KLA Corp fell 5% after its own dismal forecast.

“No words can portray or explain the historic collapse of Intel,” said Rosenblatt Securities’ Hans Mosesmann, who was among the 21 analysts who cut their price targets on the stock.

The poor outlook underscored the challenges facing Chief Executive Pat Gelsinger as he tries to reestablish Intel’s dominance of the sector by expanding contract manufacturing and building new factories in the United States and Europe.

Courtesy Reuters. By Aditya Soni