Intel shares took a hit after the company provided underwhelming guidance for the current quarter. This setback has left analysts skeptical about Intel's ability to regain momentum.

The Leading Chip Maker Faces Challenges

Although Intel reaps the benefits of the artificial intelligence boom that has notably favored competitors like Nvidia and AMD, it has yet to deliver on its promises. During the earnings call, Chief Financial Officer David Zinser predicted a lackluster first quarter.

Intel's Stock Plunges in Pre-market Trading

As a result of the disappointing guidance, Intel shares experienced a significant drop of 12% in premarket trading, falling to $43.69 per share. Despite this setback, Intel's stock still managed to climb by an impressive 53% over the past three months.

Analysts Remain Cautious Amidst Uncertainty

Oppenheimer's Rick Schafer and his team maintained a Neutral rating for Intel shares following the earnings report. They observed that the company's traditional markets, such as PCs and servers, are not growing as rapidly as before. Additionally, they expressed skepticism about the maturity of Intel's AI offerings, stating that it still needs to prove its worth.

Lucas Keh, an analyst at Third Bridge, highlighted investors' disappointment with Intel's data center processor growth. He raised concerns about the demand for alternatives to Nvidia's processors, given the slow delivery of Intel's chips.

Market Reaction

In response to Intel's weak guidance, Nvidia shares slipped 1.7% in pre-market trading, while AMD saw a decline of 3%. IBM also experienced a minor drop of 0.3%. Furthermore, futures for the Nasdaq index, known for its focus on technology companies, traded 0.8% lower.

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