Intel shares plunged approximately 28% on Friday, October 30, after the chipmaker issued a weaker-than-expected fourth-quarter revenue forecast and warned of declining profit margins. The sell-off reduced the value of the US government’s stake in Intel by approximately $12 billion, although the company’s shares remained more than 70% higher for the year.
According to Intel’s quarterly earnings report, the company expects fourth-quarter revenue between $15 billion and $16 billion, below analysts’ estimates of approximately $17 billion. Intel also forecast a decline in gross profit margin to 37% from 43% and warned that its substantial investments would prevent it from generating positive cash flow.
US Government’s Intel Investment Loses $12 Billion in Value
The decline wiped approximately $12 billion from the market value of the US government’s Intel holdings, according to CNBC. The Trump administration acquired a 10% stake in Intel in 2025 as part of efforts to support domestic semiconductor manufacturing.
Nvidia, which also invested in Intel in 2025, recorded a smaller share-price decline during Friday’s trading session. Other technology companies, particularly semiconductor manufacturers, also experienced losses.
Despite the decline, Intel shares remained more than 70% higher year to date, leaving the government’s investment and Nvidia’s holdings above their original purchase values. However, the stock had fallen substantially from its earlier highs during the summer.
Rising Memory Prices Affect PC Demand
Intel CEO Lip-Bu Tan said rising memory prices and limited component availability were affecting demand for personal computers. He explained that customers had begun warning of weaker PC sales as increasing hardware prices placed additional pressure on corporate IT budgets.
The demand for memory and other components from AI infrastructure providers has contributed to higher PC prices, making it more expensive for consumers and businesses to purchase new computers. Intel faces these challenges as it continues investing in manufacturing capacity and advanced semiconductor production.
Intel’s Data Center Revenue Grows 78% Despite Manufacturing Constraints
Intel’s Data Center and AI business generated $7.3 billion in third-quarter revenue, representing a 78% increase from the same period last year. The company’s overall quarterly revenue reached $16.5 billion, up 21%, according to its official earnings announcement. Intel Corporation
However, Intel faces manufacturing capacity constraints as it works to meet demand for server processors and attract external customers to its semiconductor foundry business. The company competes with Taiwan Semiconductor Manufacturing Company, which produces chips for major technology companies.
One of Intel’s newer semiconductor fabrication facilities in Arizona is operational, while another is not expected to begin operations until 2028. Intel continues to invest in expanding production capacity as demand for AI-related computing hardware increases.
Featured image credits: Wikimedia Commons
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