Intel Shares Plunge 29% in Worst Day Since 1974 as Weak Forecast Overshadows Strong Quarter
Intel shares fell about 29% on Friday, 30 October 2026, in the chipmaker’s worst single trading day since 1974, after a weak forecast for the final quarter of the year overshadowed a stronger-than-expected third quarter. The stock closed at $65.76, down from $92.07 the previous day, as investors repriced a recovery that had looked firmly under way.
The scale of the move reflected a simple tension in the results Intel reported on Thursday, 29 October, after the market closed. The quarter just finished was solid, led by surging demand for data-centre processors, while the quarter ahead looked much weaker, weighed down by a slumping personal computer market and a disrupted factory in Israel.
A strong quarter that the market looked past
Intel reported third-quarter revenue of $16.5 billion, up 21% from a year earlier, with adjusted earnings of 52 cents a share. Data-centre and AI revenue jumped 78% to $7.3 billion, which chief financial officer David Zinsner described as the company’s strongest data-centre revenue growth in 15 years.
That strength did not carry across the whole business. Revenue from the Client Computing and Physical AI Group, which sells PC chips, fell 5% to $8.1 billion, still roughly half of Intel’s product revenue. According to Intel’s third-quarter results release, chief executive Lip-Bu Tan said demand for the company’s processors remained robust, with unlocking more supply for its Xeon server chips the immediate priority.
| Segment | Q3 2026 revenue | Change from a year earlier |
|---|---|---|
| Data Center and AI | $7.3 billion | Up 78% |
| Client Computing and Physical AI (PC chips) | $8.1 billion | Down 5% |
| Intel Foundry | $6.7 billion | Up 58% |
| Total revenue | $16.5 billion | Up 21% |
The contrast between the two main product groups is the story of Intel’s year in miniature. Server demand tied to artificial intelligence is running hot, while the PC business that built the company is cooling, and the two forces pulled in opposite directions on Friday.
The forecast that changed the mood
For the fourth quarter, Intel forecast revenue of $15 billion to $16 billion, adjusted earnings of 25 cents a share, and an adjusted gross margin of 38%, down from 44.1% in the third quarter. Analysts had expected revenue of about $17.1 billion and earnings of 43 cents a share, according to LSEG data cited in market coverage.
Even the top of Intel’s revenue range sits below what Wall Street expected, and the midpoint of $15.5 billion is below the third quarter’s $16.5 billion. Zinsner said the company sees the PC slowdown continuing at least through the first half of next year, and Intel expects PC chip revenue to fall by more than 20% in the fourth quarter compared with the third.
Two pressures are squeezing that PC business at once. Customers are working through existing inventory rather than ordering new chips, and rising memory prices are raising the cost of building a finished computer, which in turn discourages buyers. The result is a segment expected to shrink sharply in the holiday quarter, traditionally one of the strongest periods for PC sales.
An Israel factory shutdown adds to the drag
The outlook also reflects an explosion earlier in October at Intel’s fabrication plant in Kiryat Gat, Israel, which killed two workers and seriously injured a third. Intel said the disruption would reduce revenue by about $300 million in the fourth quarter, with a similar impact expected in the first quarter of 2027, or about $600 million across the two quarters.
Because turning silicon wafers into finished chips takes roughly three months, wafers still in process when the plant shut down were expected to be scrapped, with most of those write-offs landing in the fourth quarter. The incident tightened supply of 10-nanometre server products at the same time Intel is trying to expand server-chip output to meet AI demand.
Zinsner also said Intel does not expect positive free cash flow this year, a further signal that 2026 remains an investment year for a company spending heavily on manufacturing capacity. Several banks downgraded the stock on Friday, including D.A. Davidson, which moved to neutral from buy.
The sell-off spread across the chip sector
Intel’s fall did not stay contained. Nvidia, Broadcom, AMD, Arm, Qualcomm and Micron all fell on Friday, with Reuters reporting declines of between 4% and 12% across the group, and the iShares Semiconductor ETF fell more than 8%, according to Investopedia’s 30 October markets round-up.
The wider reaction matters because it shows how the market read Intel’s warning. It was not treated as a problem confined to one company, but as evidence that the AI boom’s costs, from memory prices to factory capacity, are biting even as demand for AI computing stays strong.
The episode also touched two of Intel’s largest shareholders. The United States government holds about 10% of Intel, and market coverage citing Bloomberg estimates put the one-day paper loss on that stake at roughly $12 billion, while Nvidia’s Intel investment was estimated to have lost about $6 billion in value. Those are paper estimates based on Friday’s closing price, not realised losses.
What to watch from here
The next test is whether Intel can restore server-chip supply without losing further ground in PCs. Tan has made expanding Xeon supply the stated priority, and the fourth quarter will show whether the Israel plant’s recovery and the company’s broader capacity plans can ease that constraint.
PC demand is the other half of the question. If the slowdown lasts only through the first half of 2027, as Zinsner expects, the weak fourth-quarter forecast may look like a trough. If memory prices stay high and buyers keep delaying purchases, the pressure could run longer, and the market will judge Intel’s recovery on that evidence rather than on Friday’s single-day move.
The same AI infrastructure question runs through the rest of this earnings season. The OpenAI Google AI chip plan showed rivals sharing hardware to meet computing demand, while Microsoft and Alphabet earnings week put cloud growth and AI spending under the same scrutiny Intel now faces.
