- Intel shares fell nearly 30%, marking their worst single-day drop since 1974
- The company forecast Q4 revenue below analyst estimates, citing PC market weakness
- Supply chain issues and a factory shutdown in Israel hurt data center business revenue
Intel Corp. shares plunged on Friday, heading for their worst single-day performance in more than five decades, after the chipmaker issued a weaker-than-expected revenue and earnings forecast for the current quarter. The outlook renewed concerns about the company's turnaround efforts, as a slump in the personal computer (PC) market and supply-chain disruptions weigh on its business.
The stock fell as much as 30% to $64.11 in New York trading, marking its steepest intraday decline in records dating back to 1982. It was down 29.89% at $64.49 as of 1:26 p.m., putting it on course for its worst daily performance since 1974. The sharp fall also wiped out about $12 billion in the value of the US government's stake in Intel, according to the market-value estimate cited by Bloomberg.
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Intel said on Thursday that it expects fourth-quarter revenue of $15 billion to $16 billion, below the average analyst estimate of $17 billion. Some projections had exceeded $18 billion, according to Bloomberg data. The company forecast adjusted earnings of 25 cents per share, compared with Wall Street expectations of 43 cents.
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The guidance reflects continued weakness in the PC market, where shortages of memory semiconductors and higher component prices have pushed up costs for laptop and desktop manufacturers. This has weighed on PC shipments and reduced demand for processors supplied by Intel.
Chief Executive Officer Lip-Bu Tan said memory availability and pricing were among the key challenges facing the industry. He warned that the impact could become more severe in 2027.
“I am a bit disappointed in terms of how we cannot fulfill the customer requirements,” Tan said in an interview, referring to supply constraints affecting the company's ability to meet demand.
Intel expects the PC market to remain under pressure through at least the first half of 2027. The company anticipates a 10% decline in the market next year, following an estimated 12% contraction in 2026.
READ | Intel Shares Plunge Nearly 30%, Amazon Falls As AI Spending Comes Under Scrutiny
Supply disruptions have also affected its data centre business. Tan said the division could have performed better without shortages of certain raw materials and a temporary shutdown at a factory in Israel. The facility, which experienced a fire, has been closed for two weeks and is expected to resume operations shortly.
The shutdown is expected to reduce fourth-quarter revenue by $300 million, with a similar shortfall anticipated in the first quarter of next year, Chief Financial Officer Dave Zinsner said. Since chips take around three months to move from raw silicon to finished products, the disruption could continue to affect output even after the factory reopens.
The disappointing forecast comes after a strong run in Intel shares. The stock had more than doubled in value this year through Thursday's close, with investors betting that the company would benefit from rising demand for artificial intelligence infrastructure.
Intel has gained from increased demand for general-purpose processors used in data centres, even as Nvidia Corp. continues to dominate the market for AI accelerators. However, the latest results underline the difficulty of translating that demand into a sustained recovery.
“Intel's earnings highlight the challenges the company faces in pushing its recent turnaround into a sustained recovery,” Emarketer senior analyst Asa Hiken said in a note. He added that strong demand for server processors was not enough to offset near-term pressures, particularly weakness in the traditional PC business.
Intel's third-quarter performance offered a mixed picture. Revenue rose 21% to $16.5 billion in the quarter ended Sept. 26, broadly matching analyst estimates. Earnings came in at 52 cents per share, above the average estimate of 41 cents.
Revenue from its Data Center and AI division surged 78% to $7.3 billion. In contrast, sales in the Client Computing division, which supplies chips for PCs, declined 5% to $8.1 billion.
The company's foundry business reported revenue of $6.7 billion, up 58% from a year earlier. The division manufactures chips for external customers and is central to Intel's ambition to compete with Taiwan Semiconductor Manufacturing Co. However, securing large outside customers remains crucial to making its costly manufacturing facilities more profitable.
Intel Plans Higher Spending In 2027
Under Tan, who became CEO in March 2025, Intel has been working to restore its competitiveness through cost reductions, job cuts, improved finances and fresh investments. The company has also attracted support from major investors, including Nvidia and the US government, and recently raised additional capital through a stock offering.
READ | Intel Shares Plunge After PC Slump, Supply Snags Hurt Outlook
Intel is also stepping up investments in manufacturing capacity. Executives expect spending on new plants and equipment to be around $20 billion in 2026, with a significant increase in 2027.
Zinsner described 2027 as an “investment year” as the company seeks to improve production and meet rising demand, particularly for data centre products. He cautioned that Intel is unlikely to generate free cash flow during that period.
The company also faces pressure on profitability. Its third-quarter gross margin was 43%, but it expects the figure to narrow to 38% in the current quarter.
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