Intel experienced one of its most severe trading days, with shares plunging approximately 28% on Friday. The significant decline followed the chipmaker’s announcement of a disappointing outlook for the fourth quarter.
As reported by CNBC, this market turmoil erased $12 billion from the value of the U.S. government's stake in the company. The Trump administration acquired a 10% ownership interest in Intel roughly a year prior. Meanwhile, Nvidia, which also purchased a significant stake in 2025, saw its own stock dip slightly during the widespread selloff affecting the tech sector.
Despite the recent volatility, Intel remains a profitable venture for both the government and Nvidia. The stock is still up more than 70% for the year, although it has retreated from the record highs reached during the summer.
The sell-off was triggered by Intel’s warning that fourth-quarter revenue would land between $15 billion and $16 billion, falling short of analyst expectations for around $17 billion. Additionally, the company forecasted a gross profit margin of 37%, a drop from 43%, and anticipated no positive cash flow due to heavy operational spending.
A primary factor driving the decline is the impact of the AI sector, which is consuming memory and components, thereby driving up PC prices and hindering PC sales.
"Our customers began signaling a PC slowdown based on the memory prices and availability. Year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets," Intel CEO Lip-Bu Tan stated during the earnings call.
However, there is a positive outlook in the data center division, which saw revenues surge 78% year-over-year. Nevertheless, this growth is constrained by current capacity limits at Intel's manufacturing plants and competition from Taiwan Semiconductor Manufacturing Co. While one of Intel’s new facilities in Arizona is now operational, the next major plant is not scheduled to come online until 2028.
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