Intel on Thursday alerted investors that it is lowering its forecast for first-quarter revenue due to “weaker-than-expected demand for business desktop PCs and lower-than-expected inventory levels across the PC supply chain.”

Specifically, Intel said that small- and medium-sized businesses (SMBs) are not upgrading older PCs running Microsoft’s Windows XP at the rate the company expected. “[I]ncreasingly challenging macroeconomic and currency conditions, particularly in Europe” also contributed to the chip giant’s revision of its first-quarter sales forecast by nearly $1 billion.

Intel announced in a note to investors(Opens in a new window) that it “now expects first-quarter revenue to be $12.8 billion, plus or minus $300 million, compared to the previous expectation of $13.7 billion, plus or minus $500 million.”

The news sent Intel’s shares tumbling by “as much as 5.4 percent” in early trading on Thursday, according to Reuters(Opens in a new window).

Earlier this week, Intel’s stock price gained following a report that the company’s wireless chips will be used by Apple in certain versions of the iPhone sold in 2016.

Patrick Moorhead, principal analyst for Moor Insights & Strategy, called the announcement “a bit surprising” but questioned part of Intel’s explanation for lowered revenue expectations.

“It’s a bit surprising, but then again, the European economy is shaky, as is the Euro, so that would certainly contribute to lower sales. I don’t think the Windows XP transition had much to do with this, though,” Moorhead said.

Regardless of the causes, the hoped-for return of strong growth for the PC market appears to have hit another speed bump. Research firms like Gartner have mapped out how business PC refresh cycles and the promotion of fresh form factors like Intel’s favored 2-in-1 could help revive the market, but it now seems likely that we’ll see another quarter of marginal to flat growth.

Meanwhile, Intel said that its data center business “is meeting expectations.” The company reports first-quarter earnings on April 14.