Intel (INTC) posted fourth quarter results that topped estimates, but the weaker first quarter guidance is dragging the stock lower. Many other chip companies saw their stocks fall after the muted outlook.

Yahoo Finance Tech Editor Dan Howley joins the Live show to discuss why Intel's guidance is impacting other chipmakers and what it could mean moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

AKIKO FUJITA: Shares of Intel getting punished this morning. Take a look at where shares are trading right now after the company gave a muted outlook for sales in the current quarter. Intel down more than 10%.

And this is all spilling over into the broader semiconductor space. You see AMD, Qualcomm, NVIDIA, all getting dragged down. This coming despite the sector seeing a bounce back year to date amid optimism around growth in artificial intelligence.

Let's bring in our very own Dan Howley to break down some of these moves and the results as well. Dan, you know, you have to wonder how much of this is about investors judging Intel on where they are in the AI race. How much of this is just about broader expectations-- Intel simply not meeting them at least in that quarter?

DAN HOWLEY: I think it's 50/50, right? Let's just break down the numbers real quick. Analysts were expecting first quarter revenue to come in at $14.2 billion. Intel only coming in at $12.2 billion to $13.2 billion. Now they say that there's some headwinds that the first quarter will be a little bit slower, but then the revenue will start to pick up in the remainder of the year, whether that's on the PC group or the data center AI group.

So, that's some good news, but analysts are clearly not happy with what they're seeing from the first quarter, and wondering where everything is going for Intel right now. The big things to talk about here are that they're building out their Gaudi3 AI accelerator that's going to be launching this year. That is supposed to compete with the top of the line NVIDIA and AMD accelerators.

Those are basically the graphics processing units that people talk about that are made for AI. And then, oh, yeah, they just launched their Core Ultra line of CPUs for consumers and enterprise. And so those are basically meant to kick off that AI PC age, which we've been talking about. Microsoft part of that. AMD, Qualcomm, NVIDIA obviously a part of that as well. But we're getting into this cycle where the PC refresh is coming from the early part of the pandemic when people have gone out and purchased devices.