Intel shares fell another 8.8% on Monday and closed at $59.97. On Friday the stock had already lost 28.6% - its worst day since 1974. The count starts from Friday's level of $65.76.
Intel is an American processor manufacturer. Its chips are in most laptops and servers, so the market reads the company's report as a gauge of demand across the entire electronics sector.
Why this matters to a trader. The move didn't stay within a single stock: following Intel, the entire chip sector fell on Monday.
How did the session go?
Trading was extremely heavy in volume, and the stock did not bounce off its lows.
- $65.40 - session open
- $59.40 - low of the day
- $59.97 - close
- about 231 million shares - volume versus the average of 117.7 million
Month result. In October the stock lost 45.2%, and since October 6 - about 47%. The company is worth less than half its level at the end of September.
Why did the market reverse?
The quarter itself came in strong. Revenue - $16.5 billion, up 20.9% year over year, against expectations of $16.56 billion. Adjusted profit was $0.52 per share versus a forecast of $0.39-0.41.
The sell-off was triggered by the fourth-quarter guidance.
- Revenue of $15-16 billion. That is below the third quarter and below the roughly $17 billion the market expected.
- Accident at the plant in Israel. The guidance includes a hit of about $300 million.
What does this mean for the sector?
It wasn't just one issuer falling. On Monday almost all chipmakers declined, and the industry lost more than $400 billion in market capitalization in a single session.
At the same time, the broader market was up: roughly 7 out of 10 S&P 500 stocks rose. Intel fell more than any major competitor.
Key point: the price moved far below both key moving averages - the 50-day at $101.10 and the 200-day at $86.36. Freedom Broker cut its rating from "buy" to "hold" and its target from $100 to $90, while the average target across 51 analysts is $97.42, far above the market.
What happens next?
The nearest reference point is AMD. The company reports this evening and will give guidance for its client segment. The market will use it to judge whether the problem is with Intel alone or with the entire segment.
- AMD's report - a test of the thesis that the whole segment is weak
- Dates of other reports and events - in the economic calendar
- A case for buying - Adam Johnson, portfolio manager at American Ingenuity Fund, believes the worst-case scenario is already priced in.
Did you trade this crash or watch from the sidelines?
Everyone sees sessions like this, but they're judged later by the account balance. A minus 8.8% day on a single stock is traded with the same entry - whether on a $1,500 deposit or a $100,000 notional. Only the number in the report changes. Prop firms work differently: you pay for the selection process, pass it, and trade the company's account for a share of the profit. It's calmer to understand the mechanics before the next candle like this.