Intel loses $8 billion in market value after revealing dim forecast

Intel Corp saw about $8 billion wiped off its market value after it fanned fears in the personal computer market by predicting a loss for the first quarter and giving a revenue forecast of $3 billion below estimates.

The company also struggled with slowing growth in the data center business.

Intel shares closed 6.4 percent lower, while rival Advanced Micro Devices and Nvidia ended the session up 0.3 percent and 2.8 percent, respectively.

Intel supplier KLA Corp settled 6.9 percent lower after its dismal forecast.

Intel CEO Pat Gelsinger is trying to reestablish Intel's dominance of the sector by expanding contract manufacturing and building new factories in the US and Europe.

The company has been steadily losing market share to rivals like AMD, which has used contract chipmakers such as Taiwan-based TSMC to make chips that outpace Intel's technology.

YipitData analyst Matt Wegner, noted that AMD's Genoa and Bergamo chips have a strong price-performance advantage compared to Intel's Sapphire Rapids processors.

Intel, which plans to cut $3 billion in costs this year, generated $7.7 billion from fourth quarter operations and paid dividends of $1.5 billion.

According to brokerage Bernstein, it has now become clear Intel needs to cut so much cost as its original plans prove to be fantasy," said.

With capital expenditure estimated to be around $20 billion in 2023, analysts said the company should consider cutting its dividend.