Intel Shares Fall 23% After Hours on Forecast for $600 Million in Lost Revenue

Key Facts

Intel shares fell 23% in extended trading on Thursday, October 29, after the company warned it would report non-positive cash flow this year, according to Reuters. The warning accompanied a fourth-quarter outlook below analysts’ estimates, as well as manufacturing supply constraints and a weak PC market. Common shares closed at $92.07 on October 29, compared with $95.53 in the previous session and $93.74 on October 27, according to EL7 data. The 23% figure refers to after-hours trading, while the prices cited reflect regular-session closes. The after-hours pressure also spread to shares of other chipmakers, amid concerns about Intel’s ability to meet demand and fund its manufacturing investments.

The outlook erased the effect of the quarterly results on investor sentiment, as the company’s prior performance did little to ease concerns about the period ahead. The fourth-quarter view combines weak PC demand and manufacturing supply shortages, as well as the impact of the disruption at the Kiryat Gat plant. Concerns therefore centered on the company’s ability to convert strong demand into sales in the coming months.

Chief Executive Lip-Bu Tan said the company was unable to meet strong customer demand during the third quarter, adding: "I am disappointed that we were unable to meet strong customer demand this quarter." Tan attributed near-term challenges to manufacturing supply shortages, a memory crunch and weak demand in the PC market. Revenue from the Client Computing and Physical AI Group fell 5% year over year to $8.1 billion in the third quarter, according to Reuters. Intel expects PC chip revenue to decline by a mid-20s percentage range in the fourth quarter. Zinsner said the PC market slowdown could continue at least through the first half of 2027, as the company continues to invest to increase supply.

Intel forecast that an October explosion at its Kiryat Gat plant would reduce revenue by about $600 million over two quarters, according to Reuters. The company cut its fourth-quarter revenue forecast by about $300 million and reduced its gross margin forecast by about 200 basis points, Chief Financial Officer David Zinsner said. Zinsner said a similar impact was expected in the first quarter of 2027. The plant was closed for about two weeks after the explosion, and the company plans to ramp up production by the end of the week in which Zinsner spoke to Reuters. Intel is still determining which chips can be salvaged, so its estimate of lost revenue remains a company forecast, not a final realized loss. Reuters, citing local media reports, said two people were killed and a third was seriously injured in the explosion.

Zinsner added that the incident would constrain supplies of AI server chips to cloud computing customers, at a time when the company describes demand for Xeon as strong. This comes as Intel does not expect positive cash flow in 2026, despite remaining on track for capital spending of $20 billion this year. Zinsner said spending would rise sharply in 2027 as the company continues to fund expanded production capacity and working capital. Meanwhile, the cost of the 18A manufacturing technology used in Panther Lake chips has fallen 40% since the first quarter, Zinsner said, which could support margins over the longer term. But that cost decline comes as the company faces pressure from supply, demand and cash spending.

The extended-trading decline spread to shares of Nvidia, Broadcom, AMD, Micron, Qualcomm and Arm, which fell between 1% and 6%, according to Reuters. The move places Intel’s losses within broader pressure on the semiconductor sector during extended trading. Near-term operational monitoring remains tied to the plan to ramp up production at the Kiryat Gat plant after its closure for about two weeks. The financial impact estimated by the company extends into the fourth and first quarters, while pressure from the PC market is expected to continue at least through the first half of 2027. At the same time, investors are watching 2026 spending of $20 billion and the sharp increase planned for 2027.