Qualcomm, Nvidia, Advanced Micro Devices dip as Intel drags down chip sector
Qualcomm (NASDAQ:QCOM), Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) shares fell in mid-day trading on Friday as chip giant Intel (NASDAQ:INTC) dragged down the entire sector after it forecast uncertainty for the rest of the year.
Upon reporting first-quarter earnings, Intel (INTC) issued second-quarter guidance that suggested a slowdown in the PC market may be starting, as the company forecast sales to be $18 billion, while analysts expected $18.4 billion in sales.
Nonetheless, the company stuck to its full-year forecast for a profit of $3.60 a share, on $76 billion in revenue.
Intel (INTC) shares fell more than 6% to $44 on heavy volume on Friday, while Qualcomm (QCOM), AMD (AMD) and Nvidia (NVDA) fell between 2% and 4%.
In addition to the soft guidance, Intel (INTC) Chief Executive Pat Gelsinger said the chip industry could "see challenges" until 2024, citing China's Covid-related lockdowns, a weakening global economy and psychological effects of the war in Ukraine.
Earlier in the week, Qualcomm (QCOM) posted strong second-quarter results and third-quarter guidance that prompted several Wall Street analysts to highlight the company's recent efforts to diversify into new business areas.
In an interview with Seeking Alpha, Qualcomm (QCOM) Chief Financial Officer Akash Palkhiwala said the company is "more and more becoming a processing company more than a communications company."