Intel shares fall as PC slowdown weighs on outlook

CNBC reported that Intel shares fell 29% on Friday, their worst day since the 1970s.[1] The Telegraph reported a drop of more than 30% after Intel warned of a slowdown in PC sales.[2] Intel had been up about 150% year to date before its earnings report, according to CNBC.[4] StreetInsider reported that the plunge was set to erase more than $146 billion from Intel’s market value.[5] The wider market also fell: the Nasdaq Composite declined 2.9% Friday.[1] For professionals assessing the reaction, the results and the forward guidance offer distinct signals to consider.

Intel reported third-quarter revenue of $16.5 billion, up 21% from a year earlier.[3] But the client computing and physical AI group’s revenue fell 5% year over year to $8.1 billion.[4] Data center and AI revenue moved in the opposite direction, rising 78% to $7.3 billion.[4] StreetInsider reported that PC chips accounted for roughly half of Intel’s third-quarter revenue.[5] The figures point to a business with different trends across segments, rather than uniform growth.

Intel forecast fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings per share of 25 cents.[4] LSEG analysts expected revenue of $17.1 billion and earnings per share of 43 cents.[4] StreetInsider described Intel’s revenue forecast as more than $1 billion below market estimates.[5] Intel said the PC slowdown was expected to continue at least through the first half of next year.[3] It also said it did not expect positive cash flow this year.[5] These figures give teams evaluating near-term plans a reason to distinguish the company’s reported growth from its outlook.

Intel said demand for its CPUs remained robust despite near-term headwinds in the PC industry.[3] It said it would invest in capacity and working capital to increase supply and support future growth.[3] CNBC reported that an incident at Intel’s Israeli plant caused an extended shutdown affecting chip shipments.[4] The incident was expected to cost the company about $600 million in lost revenue over two quarters.[4] Intel was in high-volume production of its 18A chip at a new Arizona fab, but it still had no external customers for its new chips.[1] Production progress and customer adoption are separate measures to track.