In a decision made public on Tuesday, a U.S. federal judge has dismissed a shareholder lawsuit accusing Intel Corp. (NASDAQ:INTC) of misleading investors about its foundry business, which contributed to a $32 billion market value wipeout after the company reported heavy losses.
What Happened: Investors alleged that Intel concealed a $7 billion operating loss tied to its chip manufacturing unit, Intel Foundry Services, in the fiscal year 2023. The company only disclosed the figure in April 2024 after restructuring its financial reporting, reported Reuters.
However, U.S. District Judge Trina Thompson ruled that shareholders had incorrectly linked the loss to the foundry business and that Intel had not misled investors.
She also found that statements made by then-CEO Patrick Gelsinger in March 2024--claiming Intel had “significant traction” and “growing demand for our foundry offering”--were not fraudulent because they referred to specific customers rather than overall revenue.
Investors may still file an amended complaint, leaving the door open for further legal action.
See Also: ‘Fire The Intel Board,’ Says Former CEO Craig Barrett As He Pushes Back On Breakup Plans, Urges Focus On Chipmaking Wins
Why It Matters: Intel has struggled to compete with major chipmakers like Nvidia Corporation (NASDAQ:NVDA) and Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), especially amid the artificial intelligence boom.
Last month, it was reported that Broadcom Inc. (NASDAQ:AVGO) and TSMC are exploring deals that could result in the breakup of Intel.
In January, the company announced its fourth-quarter earnings, showing a $1.15 billion drop in revenue compared to the previous year. Its market capitalization is currently $90.10 billion.
Intel is currently relies on its advanced 18A process node to regain profitability by 2026. This cutting-edge technology will be used in upcoming products like Panther Lake and Clearwater Forest.
Last week it was reported that Intel may not launch its chip fabrication plant in Ohio until 2030 or 2031. Financial struggles have forced the company to delay its $28 billion semiconductor project in central Ohio for a second time in 2025.
Price Action: Intel's stock ended Wednesday at $20.81, down 2.44%. It slipped another 0.62% in after-hours trading. So far this year, the stock has risen 2.92%, according to Benzinga Pro data.
Photo Courtesy: Shutterstock.com
Read Next:
- MrBeast Lost Millions On Amazon’s ';Beast Games’--Now He’s Looking To Raise Hundreds Of Millions To Take His Brand To The Next Level
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
