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Intel Shares Plunge 28% as Weak Outlook Trims Government Stake Value by $12B
Intel suffered one of its worst trading days on Friday, with shares falling about 28% after a weak fourth-quarter outlook. The rout cut the value of the U.S. government's stake by $12 billion, though the position remains profitable.
The chipmaker told investors it expects fourth-quarter revenue of $15 billion to $16 billion, below analyst expectations of roughly $17 billion. It also guided gross margin down to 37% from 43% and said heavy investment would leave it with no positive cash flow.
The sell-off spread across much of the technology sector, hitting chipmakers in particular. Nvidia, which took a large stake in Intel in 2025, also saw its shares slip on Friday.
The U.S. government acquired a 10% stake in Intel more than a year ago under the Trump administration; the drop reduced the value of that holding by $12 billion. Even after the plunge, Intel shares are up more than 70% for the year, leaving the government and Nvidia's investments in profit, well below the highs reached over the summer.
Intel chief executive Lip-Bu Tan said customers had begun warning of a PC slowdown linked to memory prices and availability, adding that year-to-date prices for system endpoints had risen sharply and were straining already tight IT budgets.
The pressure reflects how demand from the AI industry for memory and other components is pushing up PC prices and weighing on PC sales, a core market for Intel.