Intel's (INTC, Financial) CFO, David Zinsner, highlighted concerns over the impact of tariffs introduced by former U.S. President Trump and retaliatory measures by other countries, suggesting an increased risk of economic recession. During Intel's quarterly earnings call, Zinsner noted that volatile trade policies and regulatory risks are contributing to economic slowdown fears.
Despite Intel's first-quarter results exceeding expectations, driven partly by customers stockpiling chips ahead of tariff implementation, the company's revenue and profit forecasts fell short, causing its stock to drop over 5% in after-hours trading. Intel projects second-quarter revenue between $11.2 billion and $12.4 billion, with Zinsner citing tariff-induced uncertainty as a reason for the wider-than-normal range.
Zinsner acknowledged that the tariff environment complicates Intel's ability to predict performance for the current quarter and the entire year. He expects the total market for Intel's chips to potentially shrink, especially if consumers halt new computer purchases. The primary risk, according to Zinsner, is the potential decline in investment and spending as businesses and consumers react to rising costs and an uncertain economic backdrop.
Michelle Johnston Holthaus, Intel's Chief Executive of Product, suggested that consumers might opt for cheaper, older-generation chip laptops and computers amidst macroeconomic concerns and tariffs, affecting inventory strategies.
