Intel shares plunge 28% as weak outlook wipes $12 billion from government stake

WASHINGTON, Oct 30 (OPA) — Intel stock suffered one of its sharpest single-day declines on Friday after the company issued a fourth-quarter revenue outlook of $15 billion to $16 billion. The guidance fell well short of the $17 billion analysts anticipated, triggering a broader selloff across the semiconductor sector. The downturn reduced the value of the U.S. government’s 10% holding by $12 billion, a position acquired during the Trump administration over a year ago.

CEO Lip-Bu Tan attributed the shortfall to rising component costs and a cooling PC market. "Our customers began signaling a PC slowdown based on the memory prices and availability," Tan said during the earnings call. "Year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets." Intel also projected a decline in gross profit margins to 37% from 43% and warned that heavy capital expenditures would likely result in negative cash flow for the period.

Despite the Friday crash, the government’s investment remains profitable, with Intel shares up more than 70% year-to-date. The company’s data center division provided a rare bright spot, reporting 78% revenue growth compared to the same quarter last year. However, Intel faces ongoing production constraints as it attempts to scale capacity at its fabrication plants to compete with Taiwan Semiconductor Manufacturing Co.

Intel’s long-term strategy hinges on expanding its foundry business, though infrastructure development remains slow. While one new Arizona facility is currently operational, the company does not expect its next major fab to come online until 2028. Nvidia, which also holds a significant stake in Intel, saw its own shares dip in sympathy as investors reassessed the volatility of the chip manufacturing landscape.