Intel Corp.'s shares fell the most in more than two years after its revenue forecast missed analyst expectations.
Intel's shares fell 29 percent to $65.70, marking the biggest intraday decline since August 2024. Despite this sharp decline, the shares are up by approximately 77 percent throughout the year.
Company; It remains pressured by tepid demand for personal computer (PC) processors and supply chain issues in profitable data center components.
Sales in the fourth quarter will be between $15 billion and $16 billion, the company announced Thursday. According to data compiled by Bloomberg, analysts predicted sales of $17 billion on average, with some predictions going above $18 billion. The company predicted fourth-quarter earnings per share, excluding certain items, of 25 cents; Wall Street expected adjusted earnings per share of 43 cents.
Intel CEO Lip-Bu Tan said he was disappointed in the company's ability to meet demand.
Intel is struggling with a severe contraction in the personal computer market. The company's main customers, laptop and desktop computer makers, are grappling with shortages of memory semiconductors and skyrocketing component prices. While this situation cut PC shipments, it also harmed demand on the user side. In addition, CEO Lip-Bu Tan stated that the data center unit could have performed much better had there not been supply disruptions such as raw material shortages and the closure of a factory in Israel. The company is working hard to resolve these supply issues. “I'm a little disappointed in our ability to meet customer needs,” Tan said in the interview.
Making evaluations about the PC market, Tan said, "One of the main difficulties is experienced on the memory side. Memory prices have increased a lot. My prediction is that this situation will become a very serious problem for all of us in 2027. We are not alone, the entire market has been affected."
Intel predicts that the contraction in the PC market will continue until at least the first half of 2027 and will shrink by 10 percent next year, following a 12 percent decline in 2026. Still, the company is optimistic about the demand for its products in the long term and is increasing its spending on new equipment in order to increase production. Tan added that they are increasing their confidence in attracting orders from other chip manufacturers who want to use their factories to produce their own components.
Intel's shares had more than doubled in value this year as of the close, as investors bet the company would emerge as a key beneficiary of the artificial intelligence craze. Increasing use of artificial intelligence services is creating demand for Intel's general-purpose chips, prompting Nvidia Corp. It enabled it to enter a market dominated by technology. "Intel's profit highlights the challenges it faces in turning its recent transformation into a sustainable recovery. While demand for server processors is booming, Intel's disappointing outlook shows that strong demand alone is not enough to overcome near-term challenges—particularly the ongoing weakness in its traditional PC business," Emarketer senior analyst Asa Hiken said in a note.
Intel is carrying out a transformation process under the management of Tan, who took office in March 2025. Tan improved the chipmaker's financial structure, reduced employment and attracted major outside investors, including Nvidia and the US government.
The company recently sold new shares to further support its return. Intel is still working to reestablish the technological leadership once envied by Silicon Valley. The company is also seeking major customers for its foundry business, which produces components for external customers.
Intel executives said they expect spending on new facilities and equipment to be about $20 billion in 2026 and increase significantly next year. At the meeting with analysts, Chief Financial Officer (CFO) Dave Zinsner described 2027 as an "investment year" for Intel, where they will try to improve production to meet increasing demand.
Zinsner noted that this situation will be especially true for data center products and that the company will probably not be able to generate free cash flow during this period. The shutdown of the factory in Israel in the fourth quarter will result in a loss of $300 million in revenue. Zinsner said the company expects a similar deficit in the first three months of next year. The facility, which suffered a fire, has been closed for two weeks but will be back in operation within the next few days. It takes about three months for the chips to transform from raw silicon to a processed component, and power outages while the silicon wafers are in the machine often lead to them being scrapped.
The company's third-quarter sales rose 21 percent to $16.5 billion, in line with analysts' average forecast. Earnings per share for the period ending September 26 were 52 cents, against analysts' expectations of 41 cents. Intel's data center and artificial intelligence unit generated $7.3 billion in revenue, an increase of 78 percent. Sales in the client division, which produces chips for personal computers, fell 5 percent to $8.1 billion.
