Intel suffered one of its biggest stock market crashes on Friday, October 30, as its shares plunged 28.6% following a disappointing financial forecast.
The chipmaker’s stock closed at $65.76, wiping out more than $140 billion in market value in a single trading session.
The decline also reduced the value of the US government’s investment in Intel by approximately $11 billion to $12 billion.
Intel warned that weaker PC demand, rising memory prices, and heavy spending on chip manufacturing would continue to affect its business.
Why Did Intel’s Stock Crash?
Intel reported third-quarter revenue of $16.5 billion, an increase of 21% compared with the same period last year. However, investors were more concerned about the company’s expectations for the final quarter of 2026.
Intel expects fourth-quarter revenue of $15 billion to $16 billion, below analysts’ expectations of around $17 billion. The company also expects its gross profit margin to fall from 43% in the third quarter to approximately 37% in the fourth quarter.
This means Intel expects to keep a smaller percentage of its revenue after paying the direct costs of producing its products. Intel also warned that heavy spending on manufacturing expansion would put pressure on its cash flow. The disappointing forecast triggered a major sell-off, with investors concerned about the company’s ability to maintain growth.
Rising RAM Prices Are Hurting PC Sales
One of Intel’s biggest problems is the rising cost of computer components, particularly memory.
AI companies are buying large quantities of memory chips and other hardware to build and expand data centers.
This demand has contributed to higher memory prices and made it more expensive for manufacturers to produce computers.
As a result, PC makers are facing weaker demand as customers delay purchases or upgrades.
Intel CEO Lip-Bu Tan said customers had already started warning the company about slowing PC sales because of higher memory prices and limited component availability.
He explained that rising computer prices were putting additional pressure on businesses with limited IT budgets.
Intel expects the slowdown in PC demand to continue at least through the first half of 2027.
US Government Loses Billions on Intel Investment
The stock market crash also affected the US government’s investment in Intel.
In August 2025, the Trump administration acquired a stake of approximately 10% in the company as part of efforts to strengthen domestic semiconductor manufacturing.
Following Friday’s decline, the market value of that investment fell by roughly $11 billion to $12 billion.
However, the government has not necessarily suffered an actual financial loss.
Intel shares remain significantly above the price at which the government acquired its stake, meaning the investment is still worth considerably more than its original purchase price.
The decline also affected Nvidia, which invested in Intel in 2025.
Nvidia’s shares fell on Friday as the broader technology and semiconductor sectors experienced heavy selling.
Intel’s Data Center Business Is Still Growing
Despite weaker PC demand, Intel reported strong growth in its data center business.
Revenue from its Data Center and AI division increased 78% compared with the same quarter last year, reaching $7.3 billion.
The growth was driven by demand for server processors used by cloud computing companies and AI infrastructure providers.
However, Intel is struggling to produce enough chips to meet all of that demand.
The company needs to expand its manufacturing capacity while also securing more customers for its chipmaking business.
Intel is working to compete more closely with Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s leading contract chip manufacturers.
One of Intel’s new manufacturing facilities in Arizona is already operating, while another is not expected to become operational until 2028.
For now, Intel faces the challenge of managing weaker PC demand while investing heavily in the manufacturing capacity needed to support future growth.
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