Intel's stock plummeted 28% on Friday after the chip giant reported a weaker-than-expected outlook for the fourth quarter, erasing $12 billion from the government's stake in the company. The Trump administration purchased a 10% stake in Intel over a year ago. Nvidia, which took a stake in Intel in 2025, also saw its stock drop on Friday.
Intel warned it expects fourth-quarter revenue of $15 billion to $16 billion, below analyst expectations of around $17 billion. The company also projected gross profit margin would decline to 37% from 43% and said it expects no positive cash flow due to heavy investment spending.
CEO Lip-Bu Tan attributed the weakness to PC market slowdown. "Our customers began signaling a PC slowdown based on the memory prices and availability. Year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets," Tan said on the earnings call. AI industry demand for memory and components is driving up PC prices and hurting sales.
Intel's data center business grew revenue 78% year-over-year, but the unit faces capacity constraints. One new Arizona fab is operational, but the next facility is not expected online until 2028. The company competes with Taiwan Semiconductor Manufacturing Co for external customers.
Despite Friday's crash, Intel stock remains up more than 70% for the year and remains profitable for both the government and Nvidia as investors.