Intel Shares Plunge Nearly 27%, Set for Worst Day Since 1974
Stock Tanks After Dividend Suspension, Sales Slump
Intel shares plummeted nearly 27% on Friday, marking their worst day since 1974, after the chipmaker suspended its dividend and slashed its sales forecast. The stock closed at $21.48, down 26% from its previous close. It was the second worst day ever for the shares, behind only a 31% drop in July 1974.
The plunge came after Intel reported a disappointing second-quarter earnings report on Thursday. The company said its revenue fell 17% from a year earlier due to weak demand for its chips from PC and data center customers. Intel also said it will suspend its dividend for the first time in 30 years.
"The company's results were a major disappointment," said analyst Patrick Moorhead of Moor Insights & Strategy. "Intel is facing a lot of challenges, including competition from AMD and the macroeconomic downturn."
Intel's stock has been under pressure for months due to concerns about its slowing growth and competition from AMD. The company has also been hurt by the global chip shortage, which has made it difficult to meet demand for its products.
The dividend suspension is a particularly significant move for Intel. The company has paid dividends to shareholders for decades, and the suspension is a sign of the challenges it is facing.
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