Intel shares experienced a decline today following revelations in a filing about significant losses in its foundry business, which had not been previously disclosed in such depth.
The update underscored major challenges in a sector many thought could drive growth for the company. As of 11:12 a.m. ET, the stock had dropped 6.7% in response to the news.
Intel’s Foundry Venture Won’t Rescue the Company
In a recent SEC filing, Intel disclosed a $7 billion loss in its foundry division, alongside losses of $5 billion in each of the preceding two years. This update underscores the significant burden the foundry division poses on the company’s overall performance.
Despite manufacturing products for both Intel and third-party clients, the division’s struggles contributed to Intel’s meager $93 million in GAAP operating income last year, partially attributed to industry-wide semiconductor weakness.
While Intel’s foundry business has been a focal point for bullish investors, the substantial losses cast doubt on the profitability of expanding these services, despite receiving $8.5 billion from the CHIPS Act for new semiconductor manufacturing facilities in the U.S.
An Element of a Wider Challenge
Over the past decade, Intel has notably lagged behind fabless competitors such as Advanced Micro Devices, Broadcom, and Nvidia, with its own fabrication facilities appearing as a vulnerability for the company.
During an investor presentation, CEO Pat Gelsinger indicated that operating losses for the foundry business would reach their peak in 2024, with expectations for it to achieve breakeven on an operating basis around 2027.
Nevertheless, the company faces a considerable uphill battle, which explains the stock’s decline in response to the news. Investors likely harbor doubts regarding Intel’s ability to meet its target of reaching breakeven by 2027.
To have the best trading experience with us, open an account at Longhorn
- Broker
- Min Deposit
- Score
- Visit Broker
- Award-winning Cryptocurrency trading platform
- $100 minimum deposit,
- FCA & Cysec regulated
- 20% welcome bonus of upto $10,000
- Minimum deposit $100
- Verify your account before the bonus is credited
- Over 100 different financial products
- Invest from as little as $10
- Same-day withdrawal is possible
- Fund Moneta Markets account with a minimum of $250
- Opt in using the form to claim your 50% deposit bonus
Learn to Trade
Never Miss A Trade Again
Signal Notification
Real-time signal notifications whenever a signal is opened, closes or Updated
Get Alerts
Immediate alerts to your email and mobile phone.
Entry Price Levels
Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.