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Intel shares drop on profit warning

(Image credit: Image Credit: StockStudio / Shutterstock)

Shares of tech giants Intel have dropped 2.5 per cent late last night, after the company shared its forecast for the next three years.

According to the forecast, the company expects to have 28 per cent market share in the data centre processors, memory and networking chips industry, by 2023.

That equates to roughly $85 billion in sales and $300 billion in addressable market. That was enough to send the shares sliding to $49.24.

Company CEO Bob Swan said the company expects single digit percentage growth in both revenue and earnings per share. While revenue growth in data centre chips will remain in the double digits, the success will be held back by flat PC chip sales.

Speaking to Reuters (opens in new tab), Summit Insights Group analyst Kinngai Chan said Intel’s forecast means slower growth and, ultimately, falling behind the competitors.

Intel “is admitting to gross margin pressures in the next 2.5 years and that earnings will only keep pace with topline growth,” Chan said.

He added that Intel’s competitors will most likely have five per cent revenue growth in the coming years.

The company’s 7nm chips are expected to hit the shelves in 2021.

The company has recently pulled out of the mobile 5G industry, but remains interested in the 5G industry in general. It has also killed off its Itanium server chips, as well.

Image Credit: StockStudio / Shutterstock

Sead Fadilpašić
Sead Fadilpašić

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.