Intel Shares Fall 25.5% Premarket on Revenue Forecast Below Analyst Estimates
Key Facts
Intel shares fell about 25.5% to around $68.61 in premarket trading on October 30 after the company forecast fourth-quarter 2026 revenue of between $15 billion and $16 billion. The top end of the range was below analysts’ average estimate of $17.07 billion, according to LSEG data cited by Reuters. The company also forecast adjusted profit of 25 cents per share, compared with estimates of 43 cents. The outlook followed a third quarter in which revenue reached $16.51 billion, up 21% year over year, and adjusted earnings per share came in at 52 cents, versus estimates of 40 cents. The previous results showed growth and an earnings beat, but the outlook for the coming period pointed to a gap between expected revenue and profitability and market estimates.
Pressure spread to chipmakers’ shares in premarket trading, with AMD down 8.2%, Nvidia down 2.9% and Broadcom down 3.8%. Nvidia, Broadcom, AMD, Micron, Qualcomm and Arm shares had fallen between 1% and 6% in extended trading on October 29 after Intel reported results. The moves show the outlook’s impact spreading to other companies in the sector, with the size of the declines varying between extended-hours and premarket trading. In a later report on October 30, Reuters updated its estimate of Intel’s share decline to 29%, compared with 25% in its report published at 07:26. It also revised its estimate for declines in semiconductor shares in that later report to a range of between 2% and 10%.
Chief Executive Lip-Bu Tan said the company had been unable to meet strong customer demand in the third quarter. He added that Intel faces challenges including manufacturing supply shortages and an “unprecedented memory crisis,” which has resulted in weak demand for PCs. Reuters linked rising memory prices to suppliers shifting production capacity toward high-bandwidth memory chips used in AI. Higher memory costs are pushing up PC prices while weighing on consumer demand, which Reuters described as already weak. Tan’s cited supply constraints are therefore coinciding with weak demand and higher component costs.
Intel forecast PC chip revenue would decline in the fourth quarter by the mid-20s percentage range compared with the previous quarter, after falling 5% in the third quarter to $8.10 billion. The forecast places the PC market among the pressures surrounding the company’s revenue in the coming period. Chief Financial Officer David Zinsner told Reuters that an explosion at the company’s factory in Kiryat Gat reduced its fourth-quarter revenue forecast by about $300 million. Zinsner also estimated that the incident would lower gross margin by about 200 basis points in the same quarter. He expected a similar revenue impact in the first quarter of 2027, extending the estimated revenue effect across two consecutive quarters.
Zinsner said Intel does not expect positive cash flow during 2026. That adds a financial constraint to the supply and demand challenges cited by the company’s executives, as it forecasts fourth-quarter revenue below analysts’ estimates. The cash-flow warning comes alongside the company’s forecast of adjusted earnings per share of 25 cents, below estimates of 43 cents. The next period centers on the fourth quarter, when the company expects PC chip revenue to decline, followed by the first quarter of 2027, when the factory explosion is expected to have a similar impact on revenue. The company describes the outlook for PC demand as affected by a weak market, supply shortages and higher memory prices.