Intel Corp. shares plummeted on Friday to the lowest level since January after the chipmaker reported third-quarter results and detailed a spending plan that it said would pressure profitability over the next few years.

The stock dropped as much as 12 per cent, its biggest intraday percentage decline since July 2020, and this is set to be the sixth straight quarter where Intel’s results were met with a negative reaction. The decline erased more than US$20 billion in market value, according to data compiled by Bloomberg, resulting in a market capitalization of about US$203 billion. For the first time, Intel is smaller than Broadcom Inc., which has a market valuation above US$214 billion.

The weakness in Intel’s stock appeared contained. The Philadelphia Stock Exchange Semiconductor Index rose 0.2 per cent on Friday, with some names expected to benefit from Intel’s spending plans. Semiconductor capital equipment stocks were especially strong, with Applied Materials up 4.4 per cent, Lam Research gaining 2.8 per cent and KLA Corp. surging 5.2 per cent.

Applied Materials gets about 8.8 per cent of its revenue from Intel, according to supply-chain data compiled by Bloomberg, while Lam gets a little more than 8 per cent and KLA derives about 7.8 per cent.

Advanced Micro Devices, considered a primary rival to Intel, rose 0.6 per cent. 

At least four Intel analysts downgraded the stock after the report. Mizuho Securities cut its view to neutral, writing that the “capital-intensive Foundry shift adds uncertainty to its likelihood of catching up to leading-edge by executing on its core PC/Server roadmap.” Morgan Stanley cut the stock to equal weight, as the capital spending plan “requires underwriting a growth forecast that seems challenging.”

The consensus rating for the stock - a proxy for its ratio of buy, hold, and sell ratings - stands at 3.30 out of five, down from 3.43 over the weekend, according to data compiled by Bloomberg. The average price target is US$57, compared with US$63 on Sunday. The current average points to upside of nearly 15 per cent.