Intel leads chip stock selloff after bleak outlook

STORY: Shares of Intel dropped in early trading on Friday after the chipmaker shocked investors the day before with a revenue outlook that was about $3 billion short of Wall Street estimates.

Intel said it lost momentum and market share to Advanced Micro Devices and other chip rivals but vowed to regain its footing.

Wall Street was skeptical, however, as the stock fell more than 10% at the open, leading a decline in shares of chipmakers across the board.

The challenge from AMD is playing out as tech spending slumps globally, complicating Intel's efforts to clear a record inventory glut.

Business spending on tech is falling sharply as customers grow wary of a recession, and consumer electronics demand has weakened.

That's a headwind for Intel and AMD, both of which are rolling out new chips, but Intel is facing a larger inventory problem.

Intel still dominates in PC and server processing chips, with more than 70% of the market, according to tech research firm IDC. But that is down from over 90% in 2017.

Intel also faces competition from Nvidia, which is branching out into central processors. It also faces competition from its former customers, including Apple and Amazon, which are designing their own chips.