Intel Stock Falls on a Dividend Cut, and the Chip Industry Waits for Nvidia Earnings

Intel Stock


Intel (NASDAQ:INTC) slashed its legendary dividend on Wednesday to save cash, while the semiconductor industry anticipated fourth-quarter data from Nvidia (NASDAQ:NVDA).

As the chipmaker announced that it would reduce its quarterly dividend from 36.5 cents a share to 12.5 cents a share, shares of Intel (INTC) fell by a small margin. Intel issued a statement saying the dividend decrease was part of a “deliberate strategy to capital allocation [that] is aimed to position best the firm to build long-term value.”

Intel announced a reduction in its quarterly dividend and restated its outlook for a loss of 15 cents per share on sales of $10.5 billion to $11.5 billion for the first quarter.

While waiting for Nvidia to report its fourth-quarter earnings after the market closed, the stock price increased slightly.

Bank of America has cited the rising profile of AI as a driving force behind Nvidia’s recent success, the company said last week.

In a recent note, Wells Fargo cautioned that lower capital expenditures by big technology giants might hurt the chipmaker.

The market expects Nvidia to bring in $6.02B in revenue and earn 80 cents per share.

Midday trading showed slight increases for AMD, which competes with both Intel and Nvidia.

As the New York Times reported internal dissent regarding the prospects of Taiwan Semiconductor’s new Arizona fab, set to open in 2024, shares of Taiwan Semiconductor (NYSE:TSM) also witnessed fractional declines.

The news organization surveyed a cross-section of employees, who voiced concerns such as whether or not the plant could find the skilled workers needed to run it, whether or not the project was financially viable, and whether or not the cultural differences between the two countries’ workforces would cause problems.

Broadcom, Micron Technology, and On Semiconductor were all marginally down in midday trade, while Qualcomm, Texas Instruments, and Qorvo all experienced fractional increases.

While rivals continue to lose market share, investment firm Bernstein stated earlier this month that Intel stock might never again hit its “peak” income from PCs.

Featured Image: Pexels @ Valentine Tanasovich

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