Intel shares dropped 28% after a weaker Q4 outlook, with expected revenue of $15-16B and lower gross margins impacting financial forecasts.
Leadership cited a PC market slowdown driven by memory pricing and component availability pressures.
The impact on the government and Nvidia
The sharp plunge wiped $12 billion off the value of the stake held by the U.S. government, which bought a 10% stake in Intel more than a year ago. Nvidia, which also took a significant stake in the company in 2025, saw its stock fall slightly on Friday. Despite the big drop, Intel's stock is still up more than 70% for the year.
What caused the concern?
Intel warned that its fourth-quarter revenue would be between $15 billion and $16 billion, while analysts had expected around $17 billion. The company also said its profit margin would fall from 43% to 37% and that, due to heavy investments, it did not expect to be cash-positive.
A key problem is that computer sales are taking a hit as the rapid development of artificial intelligence gobbles up memory and other components, driving up computer prices. Intel CEO Lip-Bu Tan said customers have told her there is a slowdown due to component prices and availability.
The situation in the factories and the positive points
On the positive side, the company's data center revenue grew 78% year-over-year. However, Intel is struggling to meet production needs. One of its new factories in Arizona is already up and running, but the next one isn't expected to open until 2028.
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