Intel endured one of the most brutal trading sessions in its history on Friday, watching its shares plummet roughly 28 percent. The sudden crash followed a disappointing financial forecast for the fourth quarter that left investors reeling. Most notably, the slump wiped approximately 12 billion dollars off the valuation of the government’s holding, a ten percent stake acquired under the Trump administration about a year ago. While Nvidia also felt some heat due to its own significant position in Intel, much of the broader semiconductor sector was dragged down in the general sell-off.
Despite the dramatic daily loss, both the government and Nvidia remain in the green overall, as Intel’s stock has climbed more than 70 percent since the start of the year. However, those gains were overshadowed by a grim revenue projection. Analysts had been anticipating figures around 17 billion dollars for the final quarter, but Intel warned they might only hit between 15 billion and 16 billion. To make matters worse, company officials projected a dip in gross profit margins and admitted that heavy investments mean they don’t expect any positive cash flow in the near term.
CEO Lip Bu Tan attributed much of this struggle to a downturn in personal computer sales. He explained that an insatiable demand for AI components is eating up available memory and driving up costs across the board. This shift has forced consumers and businesses to tighten their IT budgets as hardware prices soar. Essentially, while AI is fueling growth elsewhere, it is currently cannibalizing the traditional PC market where Intel remains a dominant player.
There are some silver linings buried in the report, specifically within Intel’s data center division which saw revenue surge by 78 percent compared to last year. Yet, scaling that success depends entirely on manufacturing capacity. While one new facility in Arizona is now running, another critical plant won’t be ready until 2028. Until then, Intel continues to fight an uphill battle to catch up with its primary rival, Taiwan Semiconductor Manufacturing Co., leaving shareholders anxious about how long these growing pains will last.