Intel, once the unchallenged king of computer chips, has suffered one of the worst days in its long history on the stock market. On Friday, October 30, the American chipmaker saw its shares plunge by 28.6 percent, closing at 65.76 dollars and wiping more than 140 billion dollars off its market value in a single trading session. The scale of the fall stunned even seasoned market watchers, because it came just a day after the company had reported results that, on the surface, looked encouraging. Investors, however, were not looking backwards at what Intel had already achieved. They were looking forwards, and what they saw in the company’s forecast for the final three months of 2026 worried them deeply.
Why Did Intel’s Stock Crash?
The immediate trigger was Intel’s guidance for the fourth quarter. The company told investors it expected revenue of between 15 billion and 16 billion dollars for the period, well below the roughly 17 billion dollars that analysts had been predicting. Its profit outlook was weaker still, with adjusted earnings of just 25 cents a share expected, against the 43 cents that Wall Street had pencilled in. That gap was enough to spark a frantic sell-off, so sharp that several reports described it as Intel’s worst single-day fall since 1974, more than five decades ago. Finance chief David Zinsner added to the gloom by warning that the company did not expect positive cash flow this year, underlining how expensive Intel’s rebuilding effort has become.
Rising RAM Prices Are Hurting PC Sales
At the heart of the problem lies a squeeze in the personal computer market, the business that built Intel’s name. The company warned that weaker demand for PCs, rising memory prices and heavy spending on chip manufacturing would continue to weigh on its results. Artificial intelligence firms are buying enormous quantities of memory chips and other hardware to build and expand their data centres, and that surge in demand has pushed memory prices higher and made it more expensive to produce computers. As a result, PC makers are facing softer demand, as customers put off purchases or upgrades in the face of higher prices. Intel chief executive Lip-Bu Tan said customers had already begun warning the company about slowing PC sales because of dearer memory and limited availability of components. Intel now expects the slowdown in PC demand to last at least through the first half of 2027, a longer chill than many investors had expected.
US Government Loses Billions on Intel Investment
The crash also hit one of Intel’s most unusual shareholders: the United States government. In August 2025, the Trump administration acquired a stake of roughly 10 percent in the company, for about 8.9 billion dollars, as part of a drive to strengthen domestic semiconductor manufacturing and reduce dependence on overseas chip production. Following Friday’s decline, the market value of that holding fell by roughly 11 billion to 12 billion dollars. That sounds alarming, but the picture is more nuanced than the headline suggests. The government bought its shares at around 20.47 dollars each, far below even Friday’s battered closing price of 65.76 dollars, so the investment remains worth considerably more than its original cost. The same applies to Nvidia, which agreed in September 2025 to invest 5 billion dollars in Intel at 23.28 dollars a share. Its holding also fell in value on Friday, yet remains well above its purchase price.
Intel’s Data Center Business Is Still Growing
Beneath the grim forecast, there was a bright spot that investors largely overlooked in the panic. Intel reported third-quarter revenue of 16.5 billion dollars, up 21 percent on the same period a year earlier, and its Data Center and AI division grew by 78 percent to reach 7.3 billion dollars. That growth was driven by demand for server processors used by cloud computing companies and by firms building artificial intelligence infrastructure, exactly the market Intel needs to win if its turnaround is to succeed. The trouble is that Intel is struggling to produce enough chips to meet all of that demand. Manufacturing and packaging shortages are limiting output, and an explosion at its Kiryat Gat plant in Israel in October, which killed two workers and seriously injured another, disrupted production further and is expected to cost roughly 300 million dollars in fourth-quarter revenue. One of its new manufacturing facilities in Arizona is already operating, while another is not expected to come online until 2028.
What happens next will test whether Friday’s crash was a painful correction or the start of a deeper crisis. Intel’s leadership insists that rebuilding the company is a journey measured in years, not quarters. For that argument to hold, the company must turn booming demand for its data centre chips into actual sales, rather than losing orders because it cannot make enough of them, and ride out a PC market that may stay weak well into 2027. If it can, Friday’s fall may be remembered as the moment the market lost patience just before the recovery took hold. If it cannot, the worst day in half a century may prove to be a warning of harder times ahead, not only for Intel but for an American chip industry that Washington has bet billions of dollars on saving.
