First came the blow to Apple Inc. ( Nasdaq to rebalance index, cuts Apple's weighting ). Now, tech investors, it's Intel Corp.'s turn.
Canaccord Genuity semiconductor analyst Bobby Burleson lowered his price target on Intel from $22 (U.S.) to $19.
"Intel is likely to guide short of consensus, in our view, as Q2 PC production appears to be tracking below previous expectations," he said.
"While weakness is attributable to supply disruptions, we believe demand concerns for notebooks and the potential for server share shift in the back half of the year could pressure the stock."
Mr. Burleson said Advanced Micro Devices Inc. may begin to regain some market share in servers. "While we don't expect AMD to recover substantial server market share, the company's present 6 per cent share appears unsustainably low."
"As Intel derives approximately 90 per cent of its revenues from the PC market, any material slowdown in PC unit growth could impact the company's revenues and profitability. In addition, declining production volumes at Intel's internal factories could negatively impact gross margins, as could adverse pricing conditions driven by aggressive competitors in the processor and chipset space," he wrote in a research report.
He lowered his revenue target for 2011 from $50.5-billion to $48.75-billion and earnings per share estimate from $2.05 to $1.92.
Nasdaq futures were down 15.25 points or 0.7 per cent, at 2325.25 about an hour before the market opened.