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Following the US chipmaker’s slump on Wall Street with dismal earnings projections, Intel Corp. was set to erase nearly $8 billion in market value, triggering fears of a personal computer market downturn.

In addition to the impact of slow growth in the data center business, the company forecast an unexpected first-quarter loss that was $3 billion below estimates for revenue.

Hans Mosesmann of Rosenblatt Securities, one of the 21 analysts to lower their price targets on the stock, said that "no words can portray or explain the historic collapse of Intel."

While rivals Advanced Micro Devices and Nvidia recovered from severe premarket losses to trade flat, Intel shares dropped more than 7%. After releasing a poor forecast, Intel supplier, KLA Corp., saw a 5% decline as well.

The dismal outlook highlighted the difficulties Chief Executive Pat Gelsinger faces as he works to restore Intel’s dominance in the market by boosting contract manufacturing and constructing new facilities in the US and Europe.

The company has been steadily losing market share to competitors like AMD, which uses contract chipmakers like Taiwan's TSMC to produce chips that are more advanced than Intel's.

According to Matt Wegner, analyst at YipitData, AMD's Genoa and Bergamo (data center) chips should continue to increase their market share because they outperform Intel's Sapphire, Rapids processors in terms of price and performance.

Intel generated $7.7 billion in cash from operations in the fourth quarter and distributed $1.5 billion in dividends, with a $3 billion cost reduction target for this year. In 2023, analysts project that capital expenditures will be in the neighborhood of $20 billion.

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