Intel Shares Plunge Nearly 30% Following Disappointing Fourth-Quarter Guidance

Intel shares plummeted nearly 30% in early trading, putting the company on pace for its worst single-day performance in decades and erasing approximately $150 billion in market value. The steep sell-off was triggered by a fourth-quarter financial outlook that fell significantly short of Wall Street expectations, overshadowing a solid third-quarter earnings report.

During the third quarter, Intel reported adjusted earnings per share of $0.52 on $16.51 billion in revenue, topping analyst projections. The company's data center and artificial intelligence business performed exceptionally well, with revenue jumping 78% year-over-year to $7.3 billion. However, these gains were heavily counterbalanced by continuing softness in the global personal computer market.

For the final three months of the year, Intel projected revenue between $15 billion and $16 billion, alongside adjusted earnings per share of $0.25. Analysts had anticipated revenue of roughly $17 billion and earnings of $0.43 per share. Chief Financial Officer David Zinsner noted that the company expects the PC slowdown to persist at least through the first half of next year as soaring memory chip prices and tight global supplies weigh on demand.

Compounding these pressures, Intel is dealing with the aftermath of an explosion at a manufacturing facility in Israel earlier this month. The tragic accident resulted in two worker fatalities and an extended plant shutdown, which executives estimate will cost the company between $300 million and $600 million in lost revenue over the coming quarters.

CEO Lip-Bu Tan acknowledged the challenging environment during an earnings call, stating that rebuilding the company is a multi-year journey. Despite near-term headwinds, Tan emphasized that Intel remains firmly committed to its long-term strategy, including the high-volume production of its advanced 18A chips at a new fabrication plant in Arizona as an alternative to overseas manufacturers.

The sharp decline in Intel stock also impacted Washington, which holds a 9.9% stake purchased by the U.S. government last August. The drop shaved more than $10 billion off the value of the government's shares, though the investment remains valued above its initial purchase price.

Intel's downturn contributed to a broader technology market rout, dragging down shares of PC makers like Dell and HP, while other major tech companies such as Amazon and Alphabet also faced downward pressure following recent earnings reports and mounting investor concerns over heavy artificial intelligence expenditures.