Shares of Intel decreased following the announcement of a $7 billion operating loss in their foundry business. The disclosure was made in an SEC filing for its semiconductor manufacturing arm, revealing a significant loss in 2023. The stock fell by 7% on Wednesday in response to the news.

This was the first time Intel provided revenue totals specifically for its foundry division, separating it from the products business which reported an operating income of $11.3 billion in the same year. The company stated that it anticipates the peak of foundry losses in 2024 and aims to break even between the current quarter and the end of 2030.

Analysts from Cantor Fitzgerald, who maintained a neutral rating and set a $50 price target for the stock, commended Intel for its enhanced financial reporting structure. However, they emphasized the need for Intel to improve its foundry and product operating margins to drive future growth.

Stifel analysts also expressed a positive view on Intel’s strategic plans in a note released on Tuesday, reiterating a hold rating with a target price of $45 per share. They highlighted that given the multi-year execution cycle ahead, they prefer companies with more immediate AI-related benefits, such as NVDA and AMD.

According to CNBC’s Kif Leswing, Intel’s journey towards recovering from its foundry losses will involve a significant ramp-up in manufacturing leadership by 2027. The path ahead for Intel appears challenging, but the company’s strategic plans are being closely watched by industry analysts and investors alike.