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Intel's Market Value Plummets $8 Billion

Intel Corp saw a significant decline in its market value on Friday following disappointing earnings projections.

Intel logo
Intel logo

The company predicted a loss for the first quarter, and its revenue forecast was $3 billion below estimates. This news has sparked concerns about a decline in the personal computer market and the company's struggles in the data center business. Intel shares closed 6.4% lower, while rival Advanced Micro Devices (AMD) and Nvidia ended the session up 0.3% and 2.8%, respectively.

Intel CEO's Efforts to Reestablish Dominance in Chip Industry

The poor outlook has highlighted the challenges facing Intel CEO Pat Gelsinger as he attempts to reestablish the company's dominance in the chip industry. Intel has been steadily losing market share to rivals like AMD, which has used contract chipmakers to produce chips that outperform Intel's technology.

Intel CEO Pat Gelsinger
Intel CEO Pat Gelsinger

This puts Intel at a disadvantage even when the data center market bottoms out, expected in the second half of 2022, as the company would have lost even more share by then.

Intel's Cost-Cutting Measures and Cash Position

In light of the company's struggles, Intel plans to cut $3 billion in costs this year. However, some analysts have suggested that the company should consider cutting its dividend, as capital expenditure is estimated to be around $20 billion in 2023. Additionally, the magnitude of the deterioration raises concerns about Intel's cash position over time.