Intel shares fall 28 percent as weak outlook erases billions in value

Intel shares experienced a significant decline on Friday, falling approximately 28 percent in one of the worst trading days in the company’s history. The sharp drop followed the chipmaker’s release of a fourth-quarter outlook that fell short of market expectations. This sell-off reduced the value of the United States government’s stake in the company by $12 billion, according to reports from CNBC. The Trump administration acquired a 10 percent interest in Intel more than a year ago. Nvidia, which also secured a substantial investment in Intel during 2025, saw its own shares decrease slightly on the same day. The broader technology sector, particularly other semiconductor manufacturers, was also affected by the widespread selling.

Despite the recent volatility, Intel remains a profitable investment for both the government and Nvidia. The stock has increased by more than 70 percent over the course of the year, although it has retreated from the peak prices recorded during the summer months. The immediate trigger for the market reaction was Intel’s guidance for fourth-quarter revenue, which the company projected to be between $15 billion and $16 billion. Analysts had anticipated figures closer to $17 billion. Additionally, Intel warned that its gross profit margin would decrease to 37 percent from 43 percent. The company also indicated that heavy investment spending would result in no positive cash flow for the period.

The primary challenge facing Intel is the impact of the artificial intelligence industry on personal computer sales. High demand for memory and other components by AI sectors has driven up component costs, which in turn has increased the price of finished PCs. Lip-Bu Tan, the chief executive officer of Intel, stated that customers have begun to signal a slowdown in PC purchases due to these rising prices and availability issues. He noted that system endpoint prices have increased significantly year-to-date, placing additional pressure on limited IT budgets. On a more positive note, revenue from Intel’s data center business grew by 78 percent compared to the same quarter in the previous year. However, the company’s ability to expand this segment is currently constrained until it can bring more manufacturing capacity online and secure additional external customers. While one of Intel’s new fabrication plants in Arizona is currently operational, the next facility is not expected to be online until 2028.