Intel
Dreamstime
Intel
‘s disappointing results and warning of a contracting data-center market knocked the stock in some of its key rivals on Friday.
Intel
(ticker: INTC) shares were down 10% in premarket trading after the chip maker missed expectations for the fourth quarter and provided a revenue forecast for its March quarter far below expectations.
Advanced Micro Devices
(AMD) traded down 2.9% in premarket trading, while
Nvidia
(NVDA) fell 2.1%.
Intel’s warning that the data-center market would contract in the first half of this year was taken as particularly poor news for AMD and
Nvidia,
which compete heavily in the sector.
“[Intel] continues to deal with the postpandemic slump in demand after the work-from-home and IT infrastructure upgrade wave boosted sales the prior two years,” analysts at Saxo Bank said in a research note. “In part, the weak estimate is due to customers having stockpiled significant inventories that must be worked through before demand for components rises again.”
Intel wasn’t the only chip company to disappoint. Semiconductor-equipment maker
KLA Corp
(KLAC) on Thursday warned of falling customer demand. KLA stock was down nearly 6% in premarket trading.
However, companies that sell chips to the automotive and industrial sectors have struck a brighter tone in their earnings updates. European chip maker
STMicroelectronics
(STM) on Thursday reported results ahead of consensus expectations, boosted by auto companies seeking to make up for chip shortages last year.
More disruption could be coming to the sector. Japan and the Netherlands are set to join the U.S. in restricting China’s access to advanced chip-making technology, Bloomberg reported on Friday, citing people familiar with the negotiations.
Write to Adam Clark at adam.clark@barrons.com
Credit: marketwatch.com