Intel shares fall 28.6% after forecasting fourth-quarter revenue of $15 billion to $16 billion
Key Facts
Intel shares closed down 28.6% on Friday, Oct. 30, their steepest daily decline since 1974, after the company forecast fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of 25 cents a share. The revenue range was below the average analyst estimate of $17.07 billion, while the projected profit was also below their estimate of 43 cents a share, according to Reuters via Investing.com. The weak outlook refocused attention on the company’s ability to meet demand and on a slowdown in the personal computer market. It also coincided with pressure on technology and semiconductor stocks in Friday’s session. The impact of an explosion at the company’s Kiryat Gat plant also weighed on fourth-quarter revenue and margin expectations.
Intel’s chief financial officer told Reuters that the explosion cut its fourth-quarter revenue forecast by about $300 million and its gross margin forecast by about 200 basis points. He added that the company expects a similar impact in the first quarter of 2027. The incident is therefore weighing on expectations for two consecutive quarters, according to the finance chief’s estimate. This impact comes alongside the operational challenges cited by the chief executive, rather than serving as the sole explanation for the weak outlook. The figures show the scale of the reduction made to the company’s forecasts for the coming period.
The chief executive said Intel is facing manufacturing supply shortages and unprecedented pressure in the memory market, which have weakened demand for personal computers. He told analysts: "We are facing near-term challenges, including manufacturing supply shortages and unprecedented pressure in the memory market, and the resulting weakness in personal computer demand." The company expects the PC market to remain slow through the first half of 2027. That puts the PC business under pressure as the company continues to spend on manufacturing, while supply shortages limit its ability to meet demand. Intel’s chief financial officer told Reuters that the company does not expect positive cash flow in 2026, a detail included in the agency’s report.
Intel plans capital spending of $20 billion in 2026 and said spending will rise sharply in 2027 as it continues to fund manufacturing capacity. This comes as the company expects demand for server chips to grow, while its businesses compete for manufacturing resources and face higher memory costs, according to Reuters’ account of company and executive statements. By contrast, memory pressure and supply shortages are weakening PC demand, in the chief executive’s explanation. The combination pairs heavy spending on manufacturing capacity with cautious expectations for the consumer market. The expected absence of positive cash flow in 2026 also adds to the importance of the spending trajectory the company says will rise the following year.
The decline spread to other U.S. chipmakers, with shares of AMD, Arm, Qualcomm, Nvidia, Broadcom and Micron falling between 4% and 12% on Friday, according to Reuters via Euronext. An analyst at Hargreaves Lansdown said Intel’s warning gave investors a reason to trim their chip-stock positions in a session marked by a sell-first, ask-questions-later mood. The agency quoted him as saying: "The market is in a sell first, ask questions later mood, and Intel’s warning gave investors an easy excuse to take some money off the table in chip stocks." In the broader market, the Nasdaq Composite fell 2.9%, and the S&P 500 declined 1.8% in its worst day since June. The Dow Jones lost 572 points, or 1.1%, according to the Associated Press.
Attention is now turning to upcoming results from other chipmakers, including Qualcomm, which said it will release its fourth-quarter and fiscal 2026 results after the market closes on Wednesday, Nov. 4. The earnings call will begin the same day at 1:45 p.m. Pacific time, according to the company. The date follows Friday’s decline in semiconductor stocks, when Qualcomm and others fell within the sector’s range of losses reported by Reuters. The upcoming results will provide an update on the company’s performance at the end of its fiscal year. Qualcomm’s results remain the next dated event in the available facts after the selloff.