On Friday Intel's share price fell roughly 28 percent, delivering one of the steepest single-day losses in the company's history. CNBC reported that the decline wiped about $12 billion from the value of the U.S. government's holding, which the Trump administration had built to a ten-percent position about a year earlier. Nvidia, another recent investor, also saw its shares dip modestly as the broader semiconductor sector sold off.
Even after the sharp correction, Intel's stock remains up more than 70 percent for the year, meaning the government's and Nvidia's positions are still profitable overall. The rally earlier in the year had lifted the shares to levels far above those seen in the summer, cushioning the impact of the recent tumble.
The market reaction was triggered by Intel's guidance for the fourth quarter, which projected revenue between $15 billion and $16 billion, short of analyst expectations near $17 billion. The company also warned that its gross profit margin would slip to 37 percent from 43 percent and that heavy capital spending would keep cash flow negative for the period.
Intel chief executive Lip-Bu Tan told investors that customers were indicating a slowdown in PC demand because of rising memory prices and limited availability. He added that system endpoint prices had risen sharply, adding strain to already tight IT budgets. The comment was made during the earnings call and highlights the pressure on the traditional PC market.
Despite the earnings miss, Intel reported a 78 percent year-over-year increase in data-center revenue for the quarter. However, growth is constrained by limited fab capacity and competition from Taiwan Semiconductor Manufacturing Co. The company's new Arizona facility is now operational, but the next plant is not expected to start production until 2028, limiting near-term scaling.
The episode underscores the vulnerability of chipmakers to macroeconomic shifts and supply-chain pressures. The sell-off extended to other technology stocks, with investors reassessing exposure to companies tied to PC components and memory markets. Analysts note that while Intel's data-center segment shows promise, the broader industry faces headwinds from rising component costs and evolving AI workloads.