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Intel’s 12% Slide Erases More Than $26 Billion From Market Value

(Bloomberg) — Intel Corp. shares plummeted to their lowest close since December on Friday, after the chipmaker reported third-quarter results and detailed a spending plan that it said would pressure profitability over the next few years.

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The stock fell 12%, its biggest one-day percentage decline since July 2020, marking the sixth straight quarter where Intel’s results were met with a negative reaction. The drop to $49.46 a share erased $26.6 billion in value, according to data compiled by Bloomberg, cutting its market capitalization to about $201 billion. For the first time, Intel is smaller than Broadcom Inc., which has a market valuation above $212 billion.

The Philadelphia Stock Exchange Semiconductor Index fell 1.2% on Friday, though some names are expected to benefit from Intel’s spending plans. Semiconductor capital equipment stocks were especially strong, with Applied Materials Inc. up 1.9% and KLA Corp. up 2.2%. Lam Research rose 0.2%.

Applied Materials gets about 8.8% of its revenue from Intel, according to supply-chain data compiled by Bloomberg, while Lam gets a little more than 8% and KLA derives about 7.8%.

Advanced Micro Devices Inc., a primary rival to Intel, rose 0.4% on Friday.

At least four Intel analysts downgraded the stock after the report. Mizuho Securities cut its view to neutral, writing that the “capital-intensive Foundry shift adds uncertainty to its likelihood of catching up to leading-edge by executing on its core PC/Server roadmap.” Morgan Stanley cut the stock to equal weight, as the capital spending plan “requires underwriting a growth forecast that seems challenging.”

The consensus rating for the stock — a proxy for its ratio of buy, hold, and sell ratings — stands at 3.30 out of five, down from 3.43 over the weekend, according to data compiled by Bloomberg. The average price target is $57, compared with $63 on Sunday. The current average points to upside of 16%.

(Updates to market close)

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