With a bleak outlook, Intel experiences its worst day since 2020.

Intel shares slumped a day after the chipmaker announced a weak forecast for the current quarter.

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After Intel released a prediction for the current quarter that fell well short of analysts’ expectations, the chipmaker’s shares saw a 12% decline on Friday, marking the worst decline since July 2020.

Intel had a profit and revenue beat in its late-night earnings announcement on Thursday; nevertheless, the chipmaker stated that it anticipated adjusted earnings of 13 cents per share on $12.2 billion to $13.2 billion in sales this quarter. LSEG (previously Refinitiv) reports that analysts were anticipating $14.15 billion in sales and 33 cents per share in profitability.

According to CNBC research, Intel’s sales projection for the first quarter fell short of every analyst’s prediction.

While the need for artificial intelligence chips is driving certain segments of the semiconductor industry to unprecedented heights, other server components, like the central processing units, or CPUs, that Intel manufactures, are not seeing the same kind of growth.

On Friday, the average analyst estimate for Intel’s 2024 profits for the second, third, and fourth quarters dropped.

During the results call, Intel CEO Patrick Gelsinger informed analysts that the company’s programmable chip division and Mobileye, in which Intel has majority ownership, were experiencing difficulty, which would negatively impact first-quarter sales performance.

He said that the company’s primary lines of business, which included server and PC chips, were still “healthy” and that revenues would be at the lower half of the seasonal range.

In a note published on Friday, Deutsche Bank analyst Seymour Ross stated, “While such a large miss is clearly negative, we are somewhat encouraged that the drivers of the incremental decline are widely outside of INTC’s ‘core’ PC/DC CPU sectors.”

The share price of Intel as of Friday afternoon was $43.68. They almost doubled in 2023, but they’re down 13 percent this year.

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