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At present, a very shocking and historical news is coming out from the global technology and semiconductor market which is shaking the American stock market. World’s leading chip manufacturing company Intel There was an earthquake in the shares of ICICI Bank on Friday which has given sleepless nights to the investors. Intel’s shares fell by about 29 percent due to continued concerns about Artificial Intelligence (AI), declining demand for personal computers (PC), weak business estimates and production halted at a main plant in the Middle East for several days. This sensational fall is believed to be the biggest single-day fall in the company’s history since the 1970s. Due to this unexpected crash, Intel’s market cap dropped by about 140 billion dollars in one stroke i.e. in Indian currency. A huge amount of more than Rs 13.30 lakh crore was stolen Has occurred. Not only private investors and the market, but the American government and big tech companies have also fallen prey to this recession. Let us know in detail what are the main reasons behind this terrible stock crash of Intel and what effect it has on the global economy.
Panic among investors due to weak business projections and dashed expectations
The biggest reason for this devastation in Intel’s shares is the weak business projections issued by the company which shattered the market’s expectations. The company has estimated revenue for the current quarter to be between $15 billion and $16 billion, which is much lower than the estimates of Wall Street and market experts. According to media reports, according to FactSet data, the market expected Intel’s revenue to be more than $17 billion.
When investors saw these disappointing figures of the company, they started selling heavily. Experts believe that Intel is currently facing a double blow. On one hand, due to the rapid increase in demand for Artificial Intelligence (AI) data centers across the world, the prices of memory chips are skyrocketing, while on the other hand, due to this, the prices of normal computers are also becoming expensive, which is directly impacting the purchases of customers. There is a possibility of a huge decline in the personal computer market of about 12 percent this year and up to 10 percent in 2027, due to which Intel’s problems have increased further.
American government also got a shock of more than Rs 1 lakh crore
The scope of this historic fall in Intel’s shares was not limited only to private investors, but it had a direct impact. US Government It has also affected the investment. The US government holds about 10 percent stake in Intel under a strategic investment made last year.
After this huge crash on Friday, the value of this stake held by the US government increased in one stroke by about 12 billion dollars i.e. according to Indian Rupees. Huge shortfall of about Rs 1.14 lakh crore She has arrived. However, it is a matter of relief that this investment of the government is still in the profit zone, but this big blow to the government portfolio in a single day has increased the concern in the administrative circles also. Moreover, the chip giant holding a major stake in Intel Nvidia There has also been a huge decline in the value of investment of about 6 billion dollars i.e. about Rs 57,000 crore.
Factory closure and supply chain disruptions in Israel increase difficulties
The disruptions in Intel’s internal operations amid the economic recession and market pressure have added fuel to the fire. Explaining the situation, the company’s Chief Executive Officer (CEO) Lip-Bu Tan said that recently there was an unexpected accident in one of the main factories of the Israel-based company, due to which the production had to be completely stopped for several weeks due to safety reasons.
Due to factory closure, the global supply chain was badly affected and it became impossible for the company to deliver goods to customers on time. Apart from this, the company is also facing an acute shortage of a basic raw material used in making electronic components. However, the management also says that they are continuously expanding on a large scale to increase the production capacity, the positive results of which will start coming from the second half of next year.
Tough test for CEO Lip-Boo Tan, analysts downgrade ratings
For CEO Lip-Bu Tan, who will take charge of Intel in March 2025, this crisis is no less than a big litmus test. As soon as he assumed office, he took several drastic steps to bring the company’s faltering business back on track and regain its lost ground in the AI sector.
It is noteworthy that just before the financial results came out on Thursday, Intel’s shares had performed brilliantly this year and had risen by almost 150 percent. Investors remained confident in the company due to the increasing demand for central processing units (CPUs) in servers and AI related tasks. But after this big shock on Friday, the mood of the market changed completely. Analysts at the famous financial agency DA Davidson reacted immediately and reduced the rating of Intel’s stock from ‘Buy’ to ‘Neutral’. He clearly said that the weakness in the personal computer market is very deep and it is very difficult to justify the current valuation of the company’s stock amidst the current uncertainties.
Strong growth of 78% in AI and data center business, a ray of hope
Amidst all these disappointing news and financial challenges, some positive aspects have also emerged for Intel, which have the potential to save the company from sinking in the future. Revenue from the company’s data center and Artificial Intelligence (AI)-related businesses on an annual basis. Amazing increase of 78 percent Has been registered.
Intel estimates that in the future, the increasing use of ‘Agentic AI’ may cause an earthquake in the demand for CPUs in servers. The company’s internal assessment shows that in the coming five years, the global server CPU market could grow from $40 billion to directly touch the huge figure of $200 billion. If Intel manages to overcome its production problems in time, this sector could prove to be a game-changer for it.
At present, all the attention of the market is focused on the problems created by the company’s weak revenue estimates, sluggishness in the PC market and plant closures. The impact of this tsunami in Intel’s shares was clearly visible on other giant companies of the global chip sector as well, and there was heavy pressure on the shares of companies like Broadcom, AMD and Micron. In the coming days, it remains to be seen what new strategic move Intel’s management takes to overcome this major financial crisis.