Intel lost roughly 29% on Friday — its worst trading day since July 5, 1974 — after guidance landed far below expectations. The irony is in the quarter itself: Intel beat estimates with adjusted earnings of $0.52 per share, and data-center revenue jumped to $7.3 billion, up about 78% year over year.
The stock fell as much as 30% and closed near $65. By Yahoo Finance's calculations from Norgate closing prices going back to May 1973, only two days in the company's history were worse: a 29.9% drop on July 5, 1974, and a 26.1% decline on August 2, 2024. More than $100 billion in market value disappeared in a session. The stock has given back about half its value since its June record, though it is still up more than 80% this year.
The guidance, not the quarter
The break came with the outlook. Intel expects fourth-quarter revenue of $15 billion to $16 billion, against roughly $17 billion expected by analysts, and earnings per share of $0.25 versus forecasts of $0.43.
The cause is not weak AI demand. It is the reverse. Data centers are soaking up the world's memory chips, and the resulting prices are pushing up the cost of laptops and desktops. Intel now expects PC shipments to fall about 12% this year and another 10% in 2027. An accident at its Israel factory will cost roughly $300 million in fourth-quarter revenue on top of that.
Bernstein analyst Stacy Rasgon called the outlook "(in a word) terrible" and cut his price target to $75 from $110. Dell and HP slid too, joining a broader tech rout that this week also hit Alphabet and Amazon.
Why this is about more than one chipmaker
Intel is the one large PC chipmaker that neither leads the AI wave nor rides it. It sells data-center silicon, but its revenue base is still the PC — and the PC is being squeezed by the same memory shortage that is powering the AI build-out. Its own data-center growth is not enough to close the gap.
For developers and buyers, the practical consequence is that hardware costs through 2026 and 2027 are not a temporary blip. They are what reallocating memory capacity toward AI accelerators looks like from the client side. Intel does not expect relief until memory supply and prices return to normal, and it offered no timeline for that.
A turnaround meets a wall
CEO Lip-Bu Tan, in the job since 2025, told the earnings call: "Rebuilding Intel is going to be a multiyear journey, and I remain firmly committed to making it happen." This quarter shows how steep that journey is. The company has fixed parts of its technology story and won back customers, but the cyclical half of the business is falling away faster than the structural half is growing.
What to watch
- Whether memory prices and supply actually normalize in 2027. Intel's guidance depends on that more than on its own execution. - Whether the data-center segment can hold a 78% growth rate while the PC side shrinks. - Whether AMD and Nvidia confirm that AI silicon demand still outruns client-side headwinds. - Whether Dell and HP raise prices or absorb margin pain — that decides whether the memory shortage lands on buyers or on OEMs.
