Intel shares fall post disappointing investor update

On Thursday, Intel Corporation (NASDAQ:INTC ) experienced a decline in share value, dropping over 3% following a lackluster investor presentation held the previous day. The presentation, led by the Chief Financial Officer who has also been named interim co-CEO, failed to instill confidence among investors, according to analysts from Lynx Equity Strategies.

The analysts highlighted that the CFO's affirmation of standing by the previous earnings guidance was not persuasive, casting doubts on whether the company's quarter is on track to meet expectations. Furthermore, the anticipated progress on Intel's 18A node technology seems to have hit a snag, with the production ramp now postponed from the first half of 2025 to the second half.

The lack of clarity regarding external customers for the 18A node, coupled with the absence of concrete plans for the utilization of funds from the CHIPS Act, added to investor concerns. Additionally, the analysts pointed out vague statements about improving margins for Intel Foundry Services (IFS) next year, and a downward revision of product margin outlook, particularly for Lunar Lake, due to a price increase at competitor TSMC.

The report by Lynx Equity Strategies suggested that despite the apparent reasons for Intel's stock to decline, short sellers might remain cautious due to the potential for significant news, such as the appointment of a permanent CEO, which could lead to a positive surge in stock price akin to Starbucks (NASDAQ:SBUX ).

The analysts concluded by noting the further deterioration of Intel's performance and financial metrics, with the abrupt departure of former CEO Pat Gelsinger impacting company morale and relationships with supply chain partners. The expectation is that Intel's stock will continue to face uncertainty until a new CEO is announced.

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Source: Investing.com