Intel shares fall 16% after cutting fourth-quarter guidance

Intel’s weak fourth-quarter guidance and miss on PC-focused revenue sent its stock tumbling 16% in extended trading, signaling investor anxiety over both near-term market softness and the chipmaker’s ability to compete in AI infrastructure. The guidance cut and broader market concerns about AI buildout sizing have erased October gains despite Intel’s 150% year-to-date rally.

• Third-quarter revenue rose 21% to $13.7 billion, but client computing revenue fell 5% year-over-year to $8.1 billion, missing analyst expectations.
• Intel guides fourth-quarter adjusted EPS of 25 cents on $15 billion to $16 billion revenue, versus analyst expectations of 43 cents EPS and $17.1 billion revenue.
• An explosion at Intel’s Israeli fab earlier this month will cost the company approximately $600 million in lost revenue over two quarters.

• 16% Intel stock decline in extended trading after weak Q4 guidance
• 78% Data center and AI revenue jump to $7.3 billion year-over-year
• $600M Lost revenue from Israeli fab explosion spread across two quarters
• 150% Intel stock gain year-to-date before October’s 23% decline

CNBC reported that Intel shares plummeted in extended trading Thursday (October 29) after the chipmaker issued a weak fourth-quarter forecast, citing continued softness in the global PC market. Third-quarter revenue climbed 21% from $13.7 billion a year earlier, the company said in a press release. However, revenue in Intel’s client computing and physical AI group fell 5% from the same quarter a year ago to $8.1 billion, missing analyst expectations, while data center and AI revenue jumped 78% to $7.3 billion.

PC market weakness extends through first half of next year

The company expects the personal computer slowdown to persist at least through the first half of next year, with global PC shipments having declined 4% in the second quarter from a year earlier due to soaring costs for memory and other components, according to Counterpoint Research. For the current quarter, Intel said it expects adjusted earnings per share of 25 cents on revenue between $15 billion and $16 billion, well below analyst expectations of $17.1 billion in revenue and 43 cents in EPS.

We see the PC slowdown continuing at least through the first half of next year, but we remain optimistic about the opportunities across our broader portfolio. We will continue making disciplined investments in capacity and working capital to increase supply and support future growth.

David Zinsner, Intel chief financial officer

Israeli fab explosion and production restart plans

Intel’s guidance reflects the effects of an explosion at a fab in Israel that killed two workers and seriously injured a third earlier this month. According to reporting by Reuters, Zinsner told the outlet that the incident will cost the company about $600 million in lost revenue over two quarters, with the company planning to start ramping up production there by the end of the week.

Foundry ambitions hinge on next-generation chip acceptance

Intel’s foundry business has struggled to find its footing despite being the only U.S.-based manufacturer of advanced logic chips. The company is now in high-volume production of its most advanced 18A chip out of its new fab in Arizona, providing an alternative to Taiwan Semiconductor Manufacturing Co. While Intel remains the only major customer of the chip, analysts say a major fabless chip customer could choose Intel with its next chip, 14A.

Substrate shortages remain a critical constraint on chipmaking capacity, Intel’s Zinsner said in August.

CEO Lip-Bu Tan has taken a more cautious approach to foundry spending than his predecessor, Pat Gelsinger, who launched an ambitious revival of the company’s foundry business. Last week, Intel said crews installed the first structural truss at its huge Ohio chip fab, originally expected to deliver chips in 2025, with its next fab in Arizona expected to begin operations by the end of 2028. Oracle disclosed an expanded deal with Intel this week, announcing at its annual AI conference that it would deploy the chipmaker’s next-generation Xeon server processors alongside the latest rack-scale systems from Nvidia and AMD.

The BlockWest read. Intel’s foundry bet hinges on whether major customers defect from TSMC as a second source rather than on PC market timing. The $600 million Israel hit is manageable noise against the real risk: if the data center revenue surge slows sharply, Intel’s entire margin and valuation story collapses. October’s 23% decline suggests allocators are pricing that tail risk now.

Nvidia is scheduled to report results mid-November, with AMD reporting next week, meaning investors will have visibility into whether data center buildout remains robust before Intel’s next opportunity to reset guidance. The Trump administration’s 10% stake and billions in investments from Softbank and Nvidia in the prior year mean the political and venture weight behind Intel’s foundry revival persists, but Thursday’s sell-off signals the market doubts whether the near-term PC drag can be offset by long-term foundry success.

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