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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, 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