Intel’s shares plummeted significantly on Friday, experiencing a drop of approximately 28% after the company released an outlook for the fourth quarter that fell short of expectations.
This decline resulted in a $12 billion decrease in the value of Intel’s holdings owned by the government, according to reports. The Trump administration had acquired a 10% stake in the company over a year ago. Nvidia, which invested heavily in Intel in 2025, also saw a slight dip in its stock price on the same day. The broader technology sector, especially chip manufacturers, faced a downturn amid this sell-off.
Despite Friday’s drop, Intel’s stock remains a solid investment for both the government and Nvidia, having risen more than 70% throughout the year, even as it pulls back from the elevated prices seen during the summer months.
The alarming forecast was prompted by Intel’s anticipation of fourth-quarter revenues ranging between $15 billion to $16 billion, while market analysts had projected around $17 billion. The company also indicated that its gross profit margin would decrease from 43% to 37%, and it would not achieve positive cash flow due to heavy investments.
A key issue facing Intel is the impact of the AI industry, which is intensely consuming memory and other essential components, leading to increases in PC prices and ultimately hindering PC sales.
“Our clients have begun to signal a slowdown in the PC market due to rising memory prices and availability. Prices for system endpoints have significantly increased this year, further straining already tight IT budgets,” Intel CEO Lip-Bu Tan highlighted during a conference call.
On a positive note, Intel’s data center revenue surged by 78% compared to the same period last year. However, the company faces challenges until it can enhance the capacity of its fabrication plants and attract more external customers, especially with competition from industry leader Taiwan Semiconductor Manufacturing Company. One of Intel’s new fabrication plants in Arizona is now operational, but the next one is not anticipated to be in operation until 2028.
