Intel shares fell roughly 28% on Friday, one of the company's steepest single-day declines, after the chipmaker issued a fourth-quarter outlook that came in below analyst expectations. The drop cut the value of the U.S. government's Intel holdings by $12 billion, according to CNBC. The Trump administration had the government acquire a 10% stake in Intel more than a year ago.
The sell-off was triggered by Intel's guidance for fourth-quarter revenue of $15 billion to $16 billion, while analysts had been looking for about $17 billion. Intel also warned that its gross profit margin would fall to 37% from 43%. The company said its heavy investment spending meant it expected no positive cash flow.
Intel CEO Lip-Bu Tan said customers had begun signaling a PC slowdown tied to memory prices and availability. He said system endpoint prices had risen significantly year to date, putting more pressure on already limited IT budgets. PC sales are being squeezed as the AI industry consumes memory and other components, driving up PC prices.
One bright spot was Intel's data center business, where revenue grew 78% over the year-ago quarter. Intel remains constrained on that front until it can add capacity at its fabs and attract more external customers, where it competes with Taiwan Semiconductor Manufacturing Co. One of Intel's new fabs in Arizona is operational, but the next one is not expected to be online until 2028.
Nvidia, which took a large stake in Intel in 2025, also saw its stock slip on Friday. Much of the technology industry, and chipmakers in particular, was caught in the sell-off. Despite the drop, Intel stock remains a profitable investment for both the government and Nvidia, and is up more than 70% for the year, though it has fallen well below the high prices it reached over the summer.
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