Intel plunges 28% after weak guidance spooks markets
In brief
- Intel’s stock crashes 28% after issuing weaker-than-expected Q4 revenue guidance.
- The U.S. government’s stake in Intel loses $12 billion in value following the drop.
- AI-driven component demand and rising PC prices are hurting Intel’s core business.
Intel suffered its worst trading day ever on Friday, dropping roughly 28% after the chipmaker issued weaker-than-expected guidance for the fourth quarter. According to CNBC, the selloff wiped $12 billion off the value of the U.S. government’s stake in Intel, which had acquired a 10% holding over a year ago. The Trump administration’s investment, alongside Nvidia’s 2025 stake in Intel, both faced pressure as the broader tech sector, especially chipmakers, tumbled.
The company now expects fourth-quarter revenue between $15 billion and $16 billion, below the $17 billion analysts had forecast. It also projected a gross margin decline from 43% to 37% and warned of negative cash flow due to heavy investments. Falling PC sales, driven by AI-driven demand for components and rising prices, are a key factor behind the downturn.
While Intel’s data center revenue surged 78% year-over-year, its growth is constrained by limited production capacity compared to rivals like TSMC. Its new Arizona fab is operational, but the next one won’t come online until 2028.
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