Intel shares dropped nearly 8% on Wednesday following the company’s release of long-awaited financials in an SEC filing for its semiconductor manufacturing division, revealing an operating loss of $7 billion in 2023.
“This is a bold step forward for Intel, providing investors with greater transparency into the performance of our foundry business,” said Pat Gelsinger, Intel CEO.
For the first time, Intel disclosed revenue figures solely for its foundry arm, separate from its products business, which reported $11.3 billion in operating income in 2023.
Intel anticipates that its foundry losses will reach their peak in 2024 and break even midway between the current quarter and the end of 2030.
“While we acknowledge the challenges ahead, we are confident in our ability to achieve profitability for our foundry business,” Gelsinger stated.
Analysts at Cantor Fitzgerald, maintaining a neutral rating and $50 price target on Intel stock, commended the company’s new financial reporting structure.
However, they emphasized the need for Intel to improve its foundry and product operating margins.
“Now begins the real work,” the analysts remarked in a note to investors. “Intel’s planned manufacturing leadership is expected to gain momentum by 2027.”
Stifel analysts expressed positivity toward Intel’s strategic plans in a note on Tuesday but reiterated a hold rating and a target price of $45 on the stock.
“While we recognize the potential for Intel’s long-term success, we believe nearer-term opportunities lie with AI beneficiaries such as NVDA and AMD,” the analysts concluded.
