Intel CEO Craig Barrett said Wednesday that he's not worried about semiconductor demand or his company's flagging stock price. Barrett, speaking at the Exchange eBusiness Summit in San Francisco, said the market was "overreacting" to a recent spate of discouraging news.
Intel (Nasdaq: INTC) shares were off 81 cents to $36.75 Wednesday afternoon.
Although hamstrung by the company's quiet period ahead of its Oct. 17 earnings report, Barrett told analysts and reporters that Intel will make good on its promise to invest more than $6 billion to develop and manufacture the next generation of high-performance microprocessors.
Barrett said the market was overreacting to growth concerns about his company and the technology industry in general.
"I wake up and see Yahoo! was hit because it only grew 90 percent this quarter," Barrett said. "I don't know what to call that other than an overreaction."
In late September, Intel warned that it would not meet third-quarter sales estimates, blaming weak demand and tightening profit margins for the shortfall.
Intel shares went into a predictable nose-dive, falling from $63 a share to a 52-week low of $32.50 in less than three weeks.
Several analysts cut the stock and lowered estimates, even though the world's largest chipmaker is still expected to post a profit of 38 cents a share in the quarter.
However, the company said gross profit margins will be right around 62 percent, give or take a point, slightly below the 63 percent to 64 percent it had previously anticipated.
Last quarter, Intel topped analysts' estimates, earning $3.5 billion, or 50 cents a share, on sales of $8.3 billion.
Barrett also said he was encouraged by IBM's (NYSE: IBM) announcement Tuesday that it will invest $5 billion to support its semiconductor business around the world.
IBM plans to expand facilities in Vermont and Japan, and building a new chip-making plant in New York.
"Demand is white-hot in three critical segments -- chips for big servers, chips to power the explosion in Internet access devices and chips in the networking equipment that ties everything together," CEO Lou Gerstner said in a release Tuesday.
Intel shares hit a 52-week high of $75.81 in August.
Twenty-five of the 31 analysts following the stock rate it either a "buy" or "strong buy."