Intel Stock Suffers Worst Crash in 50 Years as Weak Forecast Overshadows AI Chip Demand — SkimNews
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- Intel shares plunged nearly 30% to $65.76 on Friday, wiping out more than $146 billion in market value in the chipmaker's worst single-day decline in more than 50 years.
- Intel's fourth-quarter forecast called for revenue of $15 billion to $16 billion — a midpoint roughly $1.6 billion below the $17.07 billion Wall Street expected — with adjusted EPS of $0.25 versus $0.43 anticipated.
- Dave Zinsner said Intel's third-quarter adjusted EPS of $0.52 topped both the company's $0.38 guidance and analysts' $0.40 estimate, its eighth straight quarter of exceeding expectations, as revenue rose 21% year over year to $16.5 billion.
- Intel's Data Center and AI division generated $7.3 billion in revenue, up 78% year over year, with operating profit of $3 billion — 42% of the division's revenue.
- Intel forecast a non-GAAP gross margin of 38% for Q4, down from 44.1% in Q3, citing weaker PC demand, manufacturing constraints affecting server processors, and an accident at one of its factories in Israel.
- Dave Zinsner called 2027 an investment year and said Intel probably won't generate positive free cash flow next year, while expecting at least a 20% return on invested capital in its manufacturing node investments; Intel also expects the PC market to contract through 2027.
- Intel's 18A process, the manufacturing technology behind chips such as Panther Lake, anchors its attempt to compete with TSMC as a foundry; Nvidia invested $5 billion in Intel in September 2025 and agreed to collaborate on custom processors, while a preliminary agreement to manufacture Apple chips helped lift Intel above $130 in May.
Why it matters: Investors erased $146 billion of Intel value over a $1.6 billion guidance miss, even with Data Center and AI revenue up 78% to $7.3 billion — the selloff tracks manufacturing limits, margins and cash burn, not AI demand. A 38% gross-margin forecast and no positive free cash flow next year leave Intel's foundry expansion without a cash cushion.
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