Intel’s $15 Billion to $16 Billion Revenue Outlook Sends Server Stocks Lower

Key Facts

Shares of server makers Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer fell between 6% and 10% in trading on October 30, as selling triggered by Intel’s weaker-than-expected outlook spread to the semiconductor supply chain and AI infrastructure. Intel estimated fourth-quarter revenue of between $15 billion and $16 billion, compared with analysts’ average forecast of $17.07 billion, according to LSEG data cited by Reuters. The gap raised concerns about the company’s ability to turn demand into revenue growth as the PC market faces pressure from rising memory prices. Chief Executive Lip-Bu Tan said the company was facing “near-term challenges,” including constrained manufacturing supply and an unprecedented memory crunch, which had weakened PC demand. Intel shares fell 30.1% during Friday’s session, nearing their worst daily performance since 1974, according to the Associated Press, while the Nasdaq Composite was down 3% by 12:55 p.m. Eastern time and the S&P 500 had fallen 1.8%.

Concerns extended beyond weak end-market demand: higher memory prices are also raising PC costs, at a time when consumer demand was already weak. Reuters said memory suppliers had shifted some production capacity to high-bandwidth memory chips for AI applications, helping drive prices higher. That shift leaves the PC market facing simultaneous cost and demand pressures as AI applications compete for manufacturing resources. This backdrop informed the explanation for the decline in hardware and server makers’ shares after Intel’s results, as the outlook’s impact spread to companies tied to the supply chain and computing infrastructure. The company described a mixed picture of weakness in the PC market alongside continued strong demand for CPUs, making manufacturing capacity a decisive factor in meeting the needs of different markets.

Intel expects fourth-quarter revenue from PC chips to decline by a percentage in the mid-20s, after falling 5% to $8.10 billion in the third quarter. That means the company expects the decline in the business to accelerate between the two quarters, as the market is affected by higher memory costs and weak demand. By contrast, Intel said demand for CPUs remained strong despite headwinds in the PC market, Reuters reported, citing the company. The divergence highlights differing demand conditions across computing products, while manufacturing supply constraints limit Intel’s ability to ramp up production quickly. The fourth-quarter revenue outlook is below analysts’ estimates, adding to the pressures that sparked a sell-off in the company’s shares and across the sector.

The company’s outlook faced additional pressure from an explosion at Intel’s factory in Israel, which Reuters said would cut about $600 million in revenue over two quarters and reduce supplies of AI server chips to cloud-computing customers. The report quoted the chief financial officer as saying the company had lowered its fourth-quarter revenue forecast by about $300 million and cut its gross margin outlook by about 200 basis points because of the explosion. The CFO said a similar impact was expected in the first quarter, extending the disruption beyond year-end. The cuts affect both revenue and margins, while server-chip supplies are also affected, adding to the pressures from the PC market downturn and memory shortages. The company therefore faces manufacturing constraints while continuing to say that demand for CPUs is strong.

The capital expenditure path also adds to the operational and financial challenge. Reuters said Intel did not expect positive cash flow this year, while the CFO said capital spending would reach $20 billion in 2026 and rise sharply in 2027 as the company seeks to secure additional manufacturing tools. The planned spending comes as the company faces constrained manufacturing supply while seeking to expand production capacity. In extended trading after Thursday’s results, Intel shares fell 23%, while shares of Nvidia, Broadcom, AMD, Micron, Qualcomm and Arm declined between 1% and 6%, according to Reuters. The sell-off then widened in Friday’s session to server companies and U.S. indexes; the AP said the Nasdaq was heading for its worst day since June after falling 3% by 12:55 p.m. Eastern time.

The October 29 closing prices show levels before the subsequent reaction in Friday trading; they do not measure the declines recorded by shares on October 30. Dell closed at $475.34, Intel at $92.07, HPE at $58.87 and Super Micro at $34.43, according to EL7 data. The decline of between 6% and 10% that Reuters reported for Dell, HPE and Super Micro shares refers to trading on October 30, while the AP reported that Intel fell 30.1% during the same session. The fourth-quarter outlook, including a decline in PC-chip revenue in the mid-20s, remains central to assessing the effects of weakness in the PC market and manufacturing shortages. The company also says the factory explosion’s impact will continue into the first quarter and that capital spending will rise sharply in 2027 to secure additional manufacturing tools.