Intel Shares Plunge 28.6% in Worst Single-Day Drop in Over 50 Years

Intel shares fell 28.6% on Friday, the company's steepest one-day decline in more than five decades, after a disappointing quarterly outlook triggered a heavy sell-off. The stock closed at $65.76, erasing over $140 billion in market value in a single trading session and reducing the value of the US government's stake in the chipmaker by an estimated $11 billion to $12 billion.

The drop followed Intel's warning that softer PC demand, higher memory prices and heavy spending on manufacturing would continue to pressure its business. For the third quarter, Intel reported revenue of $16.5 billion, up 21% year on year, but investors focused on guidance for the final quarter of 2026 rather than the trailing results.

Intel expects fourth-quarter revenue of $15 billion to $16 billion, below the roughly $17 billion analysts had projected. It also forecast its gross margin falling to about 37% from 43% in the third quarter, meaning the company will retain a smaller share of revenue after covering direct production costs. Management further cautioned that large outlays on expanding manufacturing capacity would strain cash flow.

A central factor behind the weaker outlook is the rising cost of PC components, particularly memory. AI companies are purchasing large volumes of memory chips and other hardware to build and expand data centers, pushing up memory prices and raising production costs for computer makers. In turn, PC manufacturers are seeing softer demand as customers postpone purchases or upgrades.

Intel chief executive Lip-Bu Tan said customers had already begun warning the company about slowing PC sales caused by higher memory prices and limited component availability. The forecast prompted a broad investor retreat, reflecting concerns about whether the company can sustain growth while absorbing higher costs and rising capital expenditure.