Intel’s stock experienced one of its most significant declines on Friday, plummeting approximately 28% following the company’s announcement of a weaker-than-anticipated outlook for the fourth quarter. This downturn resulted in a $12 billion reduction in the value of Intel’s holdings by the government, according to hinews. The Trump administration had facilitated the government’s acquisition of a 10% stake in the company over a year ago. Nvidia, which also invested heavily in Intel in 2025, saw a slight decline in its stock on the same day. The broader technology sector, particularly chip manufacturers, was adversely affected by the selloff. Despite this recent drop, Intel’s stock remains a profitable investment for the government and Nvidia, having increased by more than 70% this year, even though it has fallen significantly from the peak prices observed during the summer.
The decline was triggered by Intel’s forecast of expected revenue between $15 billion and $16 billion for the fourth quarter, which fell short of analysts’ expectations of approximately $17 billion. Additionally, the company indicated that its gross profit margin would decrease from 43% to 37%, and due to substantial investments, it anticipated no positive cash flow. A primary challenge for Intel is the impact of the AI industry, which is consuming memory and other components, thereby 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,” cautioned Intel CEO Lip-Bu Tan during the call.
On a positive note, revenue from Intel’s data center division surged by 78% compared to the same quarter last year. However, the company faces constraints in this area until it can enhance capacity at its fabrication plants and secure more external customers, competing against the formidable Taiwan Semiconductor Manufacturing Co. One of Intel’s new fabrication facilities in Arizona is currently operational, but the next facility is not expected to be online until 2028.
