Over $35bn (£27bn) was wiped off Intel’s value today after its quarterly results alarmed investors.
Investors dumped the chipmaker, causing its shares to plummet by 28%.
After Wall Street markets closed last night, Intel announced plans to cut more than 15% of its workforce, approximately 17,500 employees, and suspend its dividend.
Intel also forecast revenue below market estimates, struggling with reduced spending on traditional data center semiconductors and a focus on AI chips, where it lags behind competitors.
In the 1990s, Intel was dominant as consumers invested heavily in Windows PCs and demanded machines with the “Intel Inside” logos. However, the rise of smartphones from companies like Apple and Samsung, which use rival chips, has shifted consumer spending.
Meanwhile, Nvidia, once considered merely a manufacturer of graphics chips, has surpassed Intel in size and become the top player in the AI chip industry.
The AI boom has driven stock prices higher in America this year, but Intel’s shares have declined since January.
Big Tech Firms in ‘Bubble Land,’ Warns $70bn Investment Manager
A major American investment manager has cautioned its clients that megacap technology stocks, particularly Nvidia, are in “bubble land.”
In a letter to investors seen by the FT, Elliot Investment Management stated that AI is “overhyped with many applications not ready for prime time.”
Nvidia’s significant share price growth depends on AI technology that is “overhyped,” the letter noted.
Elliot has been approached for comment, while Nvidia declined to comment.
