Intel Corp (NASDAQ:INTC, ETR:INL) sank 7.8% in pre-market trading after investors fled on worse-than-expected guidance for the upcoming quarter in a trading update on Thursday.
Guidance for the ongoing second quarter of US$0.10 earnings per share on revenue of US$13 billion came in below Wall Street expectations for US$0.25 and $13.57 billion.
Intel had beaten first-quarter expectations with adjusted earnings per share of US$0.18, against a loss last year, though 9% higher revenue of US$12.7 billion was below forecasts.
Chief executive Pat Gelsinger highlighted some overall weakness in demand in an interview following the update, adding he expected conditions to improve later in the year.
“Everybody has seen that the market is just a little soft,” he said, excluding artificial intelligence training, for which Intel provides chips.
He had claimed Intel was “one of two, maybe three, companies in the world that can continue to enable next-generation chip technologies,” with the company having recently separated its chip manufacturing wing into a separate line, called Intel Foundry.
This faced a US$2.5 billion operating loss over the quarter, following a US$7 billion deficit in 2023.
Though Intel has plans to develop next-generation chips for AI on US soil, the company’s main market remains PCs and laptops.
“We are confident in our plans to drive sequential growth throughout the year as we accelerate our AI solutions,” Gelsinger said.
“Our new foundry operating model [...] is already driving better decision-making.”
Shares fell 7.8% to US$32.39 in pre-market trading.