Intel Stock Crashes 28%, Erasing $12B From US Stake
Intel shares plunged 28% after a weak fourth quarter forecast, erasing $12 billion from the US government's stake as PC demand and margins weaken further.
Summary
Intel shares plunged about 28% on Friday, October 30, 2026, in one of the company’s worst sessions after its fourth quarter outlook missed expectations. The fall erased $12 billion from the government’s holdings and pulled Nvidia and other chip stocks lower. The Trump administration bought a 10% Intel stake over a year ago, while Nvidia acquired a large stake in 2025. Both investments remain profitable because Intel is still up more than 70% in 2026, despite retreating sharply from summer highs.
Intel forecast fourth quarter revenue of $15 billion to $16 billion against analysts’ roughly $17 billion, a gross margin decline from 43% to 37%, and no positive cash flow amid heavy investment. CEO Lip-Bu Tan said AI demand is constraining memory and other components, lifting PC system prices and pressuring limited IT budgets as customers signal weaker PC sales. Data center revenue grew 78% from the year ago quarter, but expansion depends on adding fab capacity and external customers while competing with Taiwan Semiconductor Manufacturing Co. One new Arizona fab is operating, while the next is not expected online until 2028.
Positives
- Intel’s more than 70% gain in 2026 keeps the government’s 10% stake and Nvidia’s 2025 investment profitable despite Friday’s collapse.
- Data center revenue increased 78% from the year ago quarter, providing Intel with a major source of growth.
- One new Intel fabrication plant in Arizona is operational, adding capacity for its manufacturing strategy.
Risks & concerns
- Intel’s roughly 28% Friday decline erased $12 billion from the government’s holdings and ranked among the company’s worst trading sessions.
- Fourth quarter revenue guidance of $15 billion to $16 billion fell short of analysts’ roughly $17 billion expectation.
- Gross margin is expected to decline from 43% to 37%, while heavy investment leaves Intel expecting no positive cash flow.
- AI demand is consuming memory and other components, raising PC prices and weakening sales as constrained IT budgets absorb the increases.
- Intel’s next Arizona fab is not expected online until 2028, limiting near term capacity growth.
- Nvidia and other chipmakers also declined as Intel’s warning spread through the broader technology sector.