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TL;DR
Intel’s shares fell about 29% on Oct. 30 after the company forecast fourth-quarter revenue and gross margins below analyst expectations, despite a strong third quarter and a 78% rise in Data Center and AI revenue. The results show the competing effects of the AI boom: demand for server chips is rising, while memory costs are weighing on PC demand and Intel’s largest business.
Intel shares fell about 29% on Friday, Oct. 30, after the company forecast fourth-quarter revenue below analyst expectations, even as it reported its strongest Data Center and AI growth in 15 years. The selloff highlighted a tension in Intel’s AI outlook: demand for server processors is growing, but higher memory costs are squeezing PC demand and weighing on the company’s largest business.
Intel’s stock closed at $65.76, down from $92.07 on Thursday, after the company released third-quarter results following the market close. Yahoo Finance calculated that the decline erased nearly $140 billion in market value. Using closing-price data going back to May 1973, Yahoo Finance found only one larger daily drop: a fall of nearly 30% on July 5, 1974. CNBC described Friday as Intel’s worst trading day since the 1970s.
The quarter itself was stronger than Intel had forecast. Revenue rose 21% to $16.5 billion, and adjusted earnings were $0.52 per share, compared with Intel’s guidance of $0.38. Data Center and AI revenue increased 78% to $7.3 billion, while PC chip revenue declined 5%. Those results did not resolve investor concerns about what comes next.
For the fourth quarter, Intel forecast revenue of $15 billion to $16 billion, below the $17.1 billion analysts expected, according to LSEG data cited by CNBC. The company also projected an adjusted gross margin of 38%, down from 44.1% in the third quarter, and adjusted earnings of $0.25 per share, compared with analysts’ $0.43 estimate. Intel cited weaker PC demand, higher memory prices and a deadly accident at its factory in Israel, which it said would reduce quarterly revenue by about $300 million.
Infographic 01 · One day, one stake
One trading day cost Washington more than it paid
Intel's stock fell about 29% on Friday after a weak forecast. Here is what that did to the shares the US government bought in August 2025, and how the price compares with what other buyers paid.
The government’s stake, on paper
433.3 million shares × price
- PaidAug 2025, at $20.47 a share$8.9B
- Thursday's close29 Oct 2026, $92.07$39.9B
- Friday's close30 Oct 2026, $65.76$28.5B
The one-day loss (about $11.4B) was larger than the $8.9B the government paid. The stake is still worth roughly three times its cost.
What different buyers paid per share
Red line: Friday’s close, $65.76
- US governmentAug 2025 · 433.3M shares$20.47
- SoftBankSep 2025 · 87M shares$23.00
- Nvidiaagreed Sep 2025 · 215M shares$23.28
- Public offeringAug 2026 · about 242M shares$95.00
2025 buyers are far above water; buyers of the August 2026 offering are about 31% below their price (my arithmetic).
Market prices as reported by Yahoo Finance and CNBC for 29–30 October 2026; no licensed price feed. Stake values: Yahoo Finance’s arithmetic with 433.3 million shares. Purchase prices from Intel’s 10-Q and the August 2025 agreement.
Sources: Yahoo Finance, 30 Oct · Yahoo Finance (stake), 30 Oct · CNBC, 30 Oct · Intel 10-Q, 30 Oct · Intel 8-K, 22 Aug 2025.
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AI Demand Brings a PC Cost Squeeze
The results show why strong AI demand does not automatically translate into broad gains for Intel. Its data-center business is growing quickly, but the company says memory costs linked to AI infrastructure are pushing up system prices and weakening demand for PCs. That matters because PC chips remain Intel’s largest business: a downturn there can offset some of the growth from server processors.
For customers and businesses, the pressure may show up in the price and availability of computers, though Intel’s report does not quantify the effect on retail prices. For Intel, the central challenge is turning demand for AI-related chips into revenue while managing production capacity and a weaker PC market. The fourth-quarter forecast suggests the near-term benefits of AI are not enough to prevent a sharp decline in expected sales and margins.
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A Rally Met a Lower Forecast
Intel’s shares had risen sharply during 2026 before the earnings release. Yahoo Finance calculated that the stock had nearly quadrupled from the start of the year to a record on June 22. Even after Friday’s decline, it remained up nearly 80% for the year, but had lost more than half its value from that peak. The scale of the selloff followed a period of high expectations as well as a weaker outlook.
The stock drop also came amid a difficult session for technology shares. CNBC reported that the Nasdaq Composite fell 2.9% on Friday, with Nvidia down 4%, Broadcom down more than 5% and Qualcomm down 11%. Intel’s fall was much steeper, and its forecast was a company-specific reason investors reassessed its near-term prospects.
The US government is also a major Intel shareholder. According to the source material’s calculations based on Yahoo Finance figures, it holds 433.3 million shares bought in August 2025 at $20.47 each, for a total cost of about $8.9 billion, using chip grants previously promised to Intel. The holding was worth about $39.9 billion at Thursday’s close and $28.5 billion at Friday’s close. CNBC put the one-day decline in its value at about $12 billion; even after that paper loss, the holding remained worth roughly three times its purchase cost.
“Not fixed yet.”
— D.A. Davidson, in a note reported by CNBC
Can Server Growth Outrun PC Weakness?
Intel’s forecast identifies immediate pressures, but the available information does not establish how long memory prices will remain elevated or how much they will affect PC purchases in coming quarters. It is also unclear how quickly Intel can increase production of server chips to meet demand, or whether that demand will translate into sustained revenue and improved margins.
The source material says Intel’s finance chief warned that positive free cash flow next year is unlikely. The reasons and scale of that outlook, as well as its implications for investment and factory spending, are not detailed here. It is also not clear whether Intel will secure enough outside customers for its manufacturing business to change its financial trajectory.
Capacity, Memory Prices and Foundry Customers
Investors and customers will be watching whether Intel can make enough server processors to serve rising AI-related demand, whether memory costs ease enough to support PC sales, and whether outside customers commit to using Intel’s factories. These are the key issues identified in the source material for judging the company’s prospects over the coming year.
Intel’s next results and any updated guidance should show whether fourth-quarter pressures continue and how the company’s data-center growth develops. Until then, the third-quarter figures confirm strong demand in Data Center and AI, while the forecast points to weaker near-term revenue and margins. The duration of the memory squeeze and Intel’s ability to expand supply remain unresolved.
Key Questions
Why did Intel shares fall after reporting higher revenue?
Investors focused on Intel’s fourth-quarter forecast, not just its past results. The company projected revenue of $15 billion to $16 billion, below the $17.1 billion analysts expected, and forecast a lower gross margin.
How fast did Intel’s Data Center and AI revenue grow?
Intel reported that Data Center and AI revenue rose 78% year over year to $7.3 billion in the third quarter. The company called it the segment’s strongest growth in 15 years.
How is AI demand affecting Intel’s PC business?
Intel said higher memory prices are raising system costs and weakening PC demand. Its PC chip revenue fell 5% in the third quarter, and the company expected a further decline of more than 20% from the third to the fourth quarter.
Did the US government lose money on its Intel stake?
The stake’s value fell by about $12 billion in one day, according to CNBC, based on the share-price decline. The source material calculates that the shares were still worth about $28.5 billion, compared with an original cost of roughly $8.9 billion; these are market values, not realized gains or losses.
Source: ThorstenMeyerAI.com
