Intel’s stock plunges 8% following substantial losses in foundry business

Intel’s shares dropped by 8% on Wednesday after the company released its long-awaited financials for its semiconductor manufacturing business in an SEC filing. The foundry arm of the company reported a loss of $7 billion in operating expenses in 2023, which is the first time Intel has disclosed revenue totals for its foundry business separately from its products business, which reported $11.3 billion in operating income in 2023.

Despite this setback, Intel expects its foundry losses to peak in 2024 and break even by the end of 2030. Analysts at Cantor Fitzgerald praised Intel’s new financial reporting structure but emphasized the need for the company to increase its foundry and product operating margins. Stifel analysts also viewed Intel’s strategic plans positively but reiterated a hold rating on the stock.

Both Cantor Fitzgerald and Stifel analysts are cautiously optimistic about Intel’s future, recognizing the long-term nature of its plans. However, they suggest that investors consider other AI-focused companies like NVDA and AMD in the shorter term due to the challenges ahead.

By Riley Johnson

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