Intel lowered to BBB+ on weak near-term growth, margin compression: S&P
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- Intel (NASDAQ:INTC) had its credit rating lowered to BBB+ from A- by S&P Global Ratings on Friday, in another hit to the semiconductor company, which has seen its stock drop nearly 60% year to date.
- S&P expects Intel’s revenue will be lower over the next two to three years than previously forecasted “as the customer spending environment and competitive dynamics in its core business segments continue to be challenged.”
- Intel also reported revenue during the first half of 2024 that failed to meet S&P’s expectations.
- “The underperformance was broad-based across all of Intel’s core business segments, with client computing, data center & AI and network and edge all facing sales headwinds as enterprise non-AI-related IT budgets remain tight,” S&P said.
- S&P expects Intel to show further weakness in data center and AI throughout the second half of 2024. Intel is also facing intense competition from Advanced Micro Devices’ (AMD) x86 server CPU.