By Kanchana Chakravarty<\/p>\n
Jan 23 (Reuters) – Intel’s shares plunged 12% before the bell on Friday after the company struggled to meet strong artificial intelligence-driven demand for data-center chips due to \u200bsupply constraints, disappointing investors betting on its turnaround.<\/p>\n
After years of sitting out the AI boom \u200cthat turned Nvidia into the world’s most valuable company, Intel is finally enjoying a demand surge for its traditional server chips \u200cthat are used alongside advanced graphics processors in data centers.<\/p>\n
That and high-profile investments from the U.S. government, SoftBank <9984.T> and Nvidia have reignited investor interest. Intel’s stock outpaced most semiconductor firms last year with an 84% gain and has extended its rally into 2026, up 47% in January so far.<\/p>\n
“The rally had been largely \u2060driven by ‘the dream’ rather than the \u200cnear-term reality or fundamentals,” TD Cowen analysts said.<\/p>\n
Intel cannot keep up with demand even as it runs factories at capacity, but Intel CFO David Zinsner said he \u200dexpects available supply to improve in the second quarter after hitting its lowest levels in the first quarter.<\/p>\n
Jefferies analysts also noted that Intel’s supply shortage will likely bottom out in March, while brokerage Oppenheimer said the constraints will \u200bebb by the second quarter.<\/p>\n
Friday’s losses followed quarterly profit and revenue forecasts that were below estimates. \u200cThe drop will erase about $31 billion from Intel’s market value, if the premarket moves hold.<\/p>\n
“The server cycle seems real, but the company appears to have woefully misjudged it with its capacity footprint caught massively off guard,” said analysts at Bernstein.<\/p>\n
The company faces a lag in changing the type of semiconductors it makes, hampering efforts to increase production of in-demand data center processors.<\/p>\n
Also weighing on Intel’s forecast was the global \u2060memory supply shortage where price hikes are expected to dampen \u200bend-market demand in the personal computer market – Intel’s biggest segment, \u200bwhere its new “Panther Lake” PC chips were expected to spark a comeback after years of market-share losses to AMD .<\/p>\n
Investors are closely examining Intel’s turnaround under CEO Lip-Bu Tan, \u200dwho has focused on cutting \u2060costs and scaling back expansive contract manufacturing ambitions.<\/p>\n
The prospect of new external customer announcements had greatly contributed to Intel’s rally ahead of results, but Tan’s comments on a post-earnings call indicated \u2060that two customers had only gone so far as to evaluate the technical details of its upcoming 14A manufacturing technology.<\/p>\n
(Reporting \u200cby Kanchana Chakravarty in Bengaluru;Additional reporting by Samuel Indyk in London and Arsheeya Bajwa \u200cin Bengaluru; editing by Alun John and Maju Samuel)<\/p>\n","protected":false},"excerpt":{"rendered":"By Kanchana Chakravarty Jan 23 (Reuters) – Intel’s shares plunged 12% before the bell on Friday after the…\n","protected":false},"author":2,"featured_media":428516,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,14372,21631,178708,176929],"class_list":["post-428515","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-data-center","tag-intel","tag-supply-constraints","tag-supply-shortage"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/428515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=428515"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/428515\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/428516"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=428515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=428515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=428515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}