Intel shares plunge 25% as weak forecast rattles investors
A stronger-than-expected third quarter failed to reassure investors, with disappointing revenue guidance, manufacturing constraints and a weakening PC market raising fresh questions about the chipmaker’s turnaround.
Intel shares plunged more than 25% in premarket trading on Friday, putting the chipmaker on course for one of its worst one-day declines on record, after a disappointing forecast overshadowed a stronger-than-expected third quarter and renewed concerns about the company's ability to meet demand for its chips.
If the losses hold through the regular session, Intel would shed around $120 billion in market value, a dramatic reversal for a stock that had more than doubled in 2026.
The selloff followed a familiar pattern for a company trying to convince investors that its turnaround is gaining traction. Intel reported a solid quarterly earnings beat, but its outlook pointed to a difficult period ahead, with weaker PC demand, manufacturing constraints and a costly expansion of production capacity all weighing on its prospects.
For the third quarter, revenue rose 21% year over year to $16.51 billion, broadly in line with analyst expectations. Non-GAAP earnings came in at 52 cents per share, beating the 40 cents expected by analysts. Reported earnings were 60 cents per share.
But the fourth-quarter forecast was considerably weaker. Intel expects revenue of between $15 billion and $16 billion, below the $17.07 billion analysts had anticipated. It forecast adjusted earnings of 25 cents per share, compared with expectations of 43 cents.
The outlook reflects pressure on both sides of Intel's business. Demand for its data-center chips remains strong, but the company has struggled to increase production quickly enough to capitalize on it. At the same time, the PC market is weakening, with higher memory prices adding to the cost of computers and weighing on demand.
Intel warned that the slowdown in the PC market could continue through at least the first half of 2027. The company expects revenue from PC chips to decline by a percentage in the mid-20s in the current quarter, following a 5% drop in the third quarter to $8.10 billion.
The manufacturing challenges have been compounded by the deadly explosion at Intel's Kiryat Gat plant in Israel in October, which killed two workers and seriously injured another. The facility was shut down for about two weeks, disrupting production of chips used in data centers.
Intel estimates that the incident will reduce revenue by roughly $300 million in the fourth quarter, with a similar impact expected in the first quarter. Taken together, the company expects the disruption to cost it approximately $600 million in revenue over the two quarters. The company is still assessing which wafers can be salvaged.
The factory setback comes at a particularly difficult time for Intel. The company is struggling to satisfy demand for data-center processors even as it invests heavily to expand manufacturing capacity and build its foundry business. Intel's data-center business recorded its strongest growth in 15 years, but the company has acknowledged that supply constraints are preventing it from fully meeting customer demand.
