Shares of Intel fell more than 10% on Friday morning, a day after the company’s third-quarter earnings confirmed a new weakness in its data center business and delays in its latest pay-generation chips.
Intel’s data center group, which generates revenue for enterprises and government customers, saw a 7% decline in revenue in the quarter. Overall, Intel’s revenue fell 4% year-on-year for the quarter ended Sept. 26.
On Friday, Bank of America downgraded Intel’s stock from neutral to unaffordable, drawing attention to the uncertainty surrounding the company’s new chips and the lack of plans to improve or update its manufacturing challenges.
Intel said in July that it had delayed its 7 nanometer processors until 2022 for computers and for the second year for servers. The company may start relying on other companies to make its chips, but will probably not be able to provide more information until January, said CEO Bob Swann.
Analysts at Bank of America said in a note on Friday that the outcome could be years of uncertainty, with minimal customers increasing their stake in AMD to mitigate risks and pushing for a more attractive price / performance / feature list.
Shares of competitor chipmaker AMD, which already sells 7 nanometer chips for PCs and graphics cards, rose more than 1% in the prime market. After closing on Thursday, the company’s stock was up more than 73% to date.
Closing on Thursday, Intel’s stock was down about 10% this year.
– CNBC’s Jordan Novet contributed to this report.
Subscribe to CNBC on YouTube.
.
