Intel Loses $8B From Market Value

Facts

• Shares of US semiconductor chipmaker Intel Corp sank more than 6.4% on Friday and wiped about $8B off its market value, in a loss that analysts have classified as 'historic.'
• The crash comes after Intel on Thursday reported a 32% year-over-year revenue decline and a net loss of $664M for the fourth quarter of 2022.
• In addition, the microprocessor giant predicted a loss of $0.15 per share for the first quarter of 2023, and its revenue forecast was well below estimates.
• Intel reportedly generated $7.7B in cash in the fourth quarter of 2022 and paid dividends of $1.5B. The firm's capital expenditure is estimated at around $20B in 2023.
• As of January 2023, rival companies Advanced Micro Devices and Nvidia have a market cap of $121.57B and $507.49B, respectively, while Intel's market cap is around $116.21B.

Sources: Reuters, CNBC, Nasdaq, Cgtn and Companiesmarketcap.

Narratives

• Narrative A, as provided by Bloomberg. The pandemic bubble has officially burst. During COVID, the semiconductor firms enjoyed a massive run-up in orders, sending sales and stock prices to record highs. Due to post-pandemic inflation and rising interest rates, chipmakers are finally bracing for the worst downturn in decades, massive erosion of market value, and a bleak future.
• Narrative B, as provided by Reuters. Turnarounds are hard work, but Intel will bounce back. Despite the pessimism of some, the tech giant still dominates the markets for PC and server processing chips, is delivering new products, and its manufacturing is ramping up. With some of the largest inventory corrections planned, Intel will regain momentum and stabilize.