Intel plunges on weak guidance as Microsoft lines up a $25 billion bond sale

what happened

According to Seeking Alpha, Intel shares lost 26% over the week after the company guided fourth-quarter results below analyst estimates. Revenue rose 21% year over year to $16.51 billion, almost in line with forecasts, while adjusted profit came in at $0.52 per share against a consensus of $0.40. The company tied its outlook to roughly $300 million of revenue impact and 200 basis points of gross margin pressure.

Microsoft is selling $25 billion of senior unsecured debt across ten tranches to fund capital spending, buybacks and general corporate needs. The company says capital expenditure will top $50 billion. Sandisk fell more than 13% even though its results and guidance beat expectations, and it announced an eight-for-one stock split. The Nasdaq Composite closed lower on Friday as investors sold technology shares after disappointing earnings. Bloomberg also reported that Marvell Technology is in advanced talks to buy data center optics maker Lumentum, with a deal possibly coming as soon as next week.

why it matters

The week showed that strong results cannot save a stock when the outlook disappoints the market. Large bond issues from hyperscalers suggest AI spending is increasingly funded with debt, which matters for credit markets and for investors' appetite for risk in the technology sector.

market impact

US tech stocks: Intel's weak guidance and the sell-off weigh on the Nasdaq and chipmakers

• ▼Nasdaq Composite pressure down — investors sold technology shares after disappointing earnings reports
• ▼Intel shares pressure down — guidance below Wall Street forecasts drove a 26% drop over the week

tags

instruments