Intel's Worst Trading Day in Years
Intel shares suffered one of their steepest single-day declines on Friday, plummeting roughly 28% after the chipmaker issued a weaker-than-expected outlook for the fourth quarter. The sell-off wiped about $12 billion off the value of the U.S. government's stake in the company, according to CNBC.
The government acquired a 10% stake in Intel more than a year ago under the Trump administration. Nvidia, which also took a major position in Intel in 2025, saw its shares dip on Friday as well. The broader tech sector—chipmakers in particular—was swept up in the sell-off.
Government and Nvidia Stakes Still Profitable
Despite the rout, Intel remains a profitable investment for both the U.S. government and Nvidia. The stock is still up more than 70% year to date, even after falling sharply from the lofty levels it reached over the summer.
Guidance Shortfall Triggers Sell-Off
The sell-off was set off by Intel's warning that fourth-quarter revenue would land between $15 billion and $16 billion, short of analysts' expectations of roughly $17 billion. The company also cautioned that gross profit margin would fall to 37% from 43%, and that heavy capital investment meant it expected no positive cash flow.
PC Slowdown Driven by AI Demand for Memory
Intel's core challenge is that PC sales are being squeezed as the AI industry absorbs memory and other components, driving up PC prices. "Our customers began signaling a PC slowdown based on the memory prices and availability. Year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets," CEO Lip-Bu Tan warned on the earnings call.
Data Center Growth Offers a Bright Spot
On the upside, Intel's data center business grew 78% year over year. However, the company remains constrained on that front until it can expand capacity at its fabs and attract more external customers—putting it in direct competition with foundry leader Taiwan Semiconductor Manufacturing Co. (TSMC). One of Intel's new fabs in Arizona is operational, but the next one is not expected to come online until 2028.
via TechCrunch AI