Intel Stock Heads for Worst Day Since 1974 After Weak Forecast and Israel Fab Blast

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Intel stock fell about 29% on Friday, Oct. 30, heading for its worst day since 1974, after the Santa Clara, California, chipmaker forecast fourth-quarter revenue well below Wall Street estimates, citing a slumping PC market and a deadly explosion that shut its Kiryat Gat factory in Israel.

The selloff came even though Intel’s third-quarter results, released Thursday, beat its own guidance. CNBC reported the stock was on pace for its second-steepest drop on record, erasing much of a rally that had left shares up about 150% this year before the report.

The forecast that sank Intel stock

Intel guided fourth-quarter revenue to $15.0 billion to $16.0 billion, with adjusted earnings of 25 cents per share and GAAP earnings of 10 cents. Analysts polled by LSEG had forecast revenue of $17.1 billion and adjusted earnings of 43 cents, according to CNBC. The midpoint of Intel’s range, $15.5 billion, is about 9% below that estimate and below the $16.5 billion Intel just reported for the third quarter, by The Boston Report’s calculation.

“We see the PC slowdown continuing at least through the first half of next year,” Chief Financial Officer David Zinsner said in the earnings release. “We will continue making disciplined investments in capacity and working capital to increase supply and support future growth.”

CEO Lip-Bu Tan described the pressures on the earnings call. “We face near-term challenges, including manufacturing supply shortages, the unprecedented memory crunch and the resulting softness in PC demand,” he said, according to Reuters as published by The Straits Times. CNBC cited Counterpoint Research data showing global PC shipments fell 4% in the second quarter from a year earlier as memory and component costs rose.

The data: a strong quarter by segment

Third-quarter revenue rose 21% to $16.5 billion from $13.7 billion. GAAP gross margin widened to 43.0% from 38.2%, and GAAP operating margin rose to 15.3% from 5.0%. Adjusted earnings were 52 cents a share, up from 23 cents, while GAAP earnings fell to 60 cents from 90 cents. The company generated $5.1 billion in cash from operations.

The split between segments explains the gap between the quarter and the outlook. Data Center and AI revenue jumped 78% to $7.3 billion, which Zinsner called Intel’s “strongest data center revenue growth in 15 years.” Intel Foundry revenue rose 58% to $6.7 billion, including sales to Intel’s own product groups. But the Client Computing and Physical AI Group, the PC business, fell 5% to $8.1 billion.

“Despite near-term headwinds across the PC industry, demand for our CPUs remains robust,” Tan said in the release. Intel also said it completed a $23 billion public equity offering and announced plans to acquire Classiq, a quantum software company.

The Israel fab explosion

The guidance includes the effects of an explosion earlier this month at Intel’s fab in Kiryat Gat, Israel, which killed two workers and seriously injured a third. Zinsner said the incident will cost about $600 million in revenue over two quarters, according to CNBC. He told Reuters the fourth-quarter revenue outlook was reduced by roughly $300 million and the gross margin outlook by about 200 basis points, with a similar revenue hit expected in the first quarter. The plant largely makes data center chips on Intel’s 10-nanometer process, and Intel planned to begin ramping production again by Nov. 1 after a two-week shutdown, Reuters reported.

Who else lost money

The drop reaches well beyond ordinary shareholders. CNBC reported that the U.S. government’s 10% stake in Intel, taken over a year ago, lost about $12 billion in value on Friday, though it remains a profitable investment, and Nvidia’s stake was looking at a drop of about $6 billion. Analysts at D.A. Davidson downgraded the stock to neutral from buy in a note titled “Not fixed yet.”

Other chip stocks fell with it. CNBC said Nvidia dropped 4%, Broadcom about 6% and Qualcomm 12%, while the Nasdaq Composite slid more than 2.5%. The week had already been rough for the sector’s suppliers and customers, from SK hynix’s record AI memory quarter amid surging memory prices, to Billerica-based Entegris’s record sales. Big Tech also sold off after Alphabet stock had its worst day on record.

Intel’s turnaround still depends on its foundry. The company is in high-volume production of its 18A chips at its new Arizona fab but has no external customers for them yet, CNBC reported. “We’re going to have a couple of customers ready to announce the next two quarters,” Tan said on the call.

Sources

• Intel: Intel Reports Third-Quarter 2026 Financial Results
• CNBC: Intel stock heads for worst day in more than 50 years, wiping $12 billion off government’s stake
• The Straits Times (Reuters): Intel shares plunge on Israel factory blast and PC weakness