Intel's outlook for the current quarter has disappointed investors. In after-hours trading, the stock initially lost around a fifth of its value. The cause is not Intel alone, but memory prices.
Forecast well below expectations
For the current quarter, Intel expects revenue of 15 to 16 billion US dollars. Analysts had been looking for something closer to 17 billion. The gap is even wider for adjusted earnings per share: Intel expects 25 cents, while the market had pencilled in 43 cents.
CFO David Zinsner told CNBC that business has been softening for weeks. Because memory has become so expensive, customers are buying fewer devices. According to Zinsner, this drag on the PC business will last through the first half of 2027. Memory prices have shot up in recent months because the build-out of AI data centers is soaking up huge amounts of memory.
Solid previous quarter, shrinking profit
The quarter that just ended still looked decent. Revenue grew 21 percent year over year to 16.5 billion US dollars, roughly in line with expectations. Profit, however, fell 18 percent to 3.3 billion US dollars. For you as a buyer, the main takeaway is simple: if you are planning new hardware, keep a close eye on memory prices.