Intel’s stock crashes, knocking $12B from government’s stake
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Intel shares fell about 28% after a weaker-than-expected fourth-quarter outlook, erasing roughly $12 billion from the US government's stake in the chipmaker.
Intel's stock suffered one of its worst days ever on Friday, falling roughly 28% after the chipmaker issued a fourth-quarter outlook well below what Wall Street had projected. The drop rippled across the semiconductor sector, with chipmakers broadly caught in the selloff and Nvidia — which took a large stake in Intel in 2025 — seeing its own shares decline modestly.
The immediate trigger was Intel's guidance. The company said it expects fourth-quarter revenue of $15 billion to $16 billion, against analyst expectations of roughly $17 billion. It also warned that gross margin would slip to 37% from 43%, and that heavy investment spending would leave the company with no positive cash flow for the period.
Intel CEO Lip-Bu Tan pointed to the AI industry's appetite for memory and other components as the root cause, saying it has pushed PC component costs higher and squeezed an already strained market. "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," Tan said on the earnings call.
There was one notable bright spot: Intel's data center business grew revenue 78% year over year. But the company's ability to capitalize on that demand is constrained by fab capacity. One of Intel's new Arizona fabs is operational, yet the next one isn't expected online until 2028, leaving the company competing for external customers against foundry leader TSMC with limited capacity in the near term.
Looking ahead, several questions remain open. Whether Intel can convert its data center momentum into broader revenue gains will hinge on fab expansion and winning outside customers — neither of which appears imminent given the 2028 timeline. Meanwhile, the memory-driven squeeze on PC demand shows no clear resolution, and the government's and Nvidia's stakes will continue to track a stock that has now demonstrated how violently it can move in either direction.
Key facts
- • Intel shares fell about 28% Friday on weak Q4 guidance, one of its worst days ever.
- • Government's 10% stake lost roughly $12 billion in value; still up over 70% for the year.
- • Q4 revenue guided to $15–16B versus ~$17B expected; gross margin to drop from 43% to 37%.
- • Data center revenue grew 78% year over year, but next Arizona fab isn't online until 2028.
Why it matters
The AI buildout is now spilling into legacy hardware markets: insatiable demand for memory is inflating PC component costs and depressing unit demand, a second-order effect builders should expect to see across more hardware categories. For AI infrastructure vendors, Intel's lagging fab capacity until 2028 reinforces TSMC's foundry dominance in the near term, meaning chip supply constraints tied to
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