Intel Stock Suffers Worst Crash in 50 Years as Weak Forecast Overshadows AI Chip Demand

In brief

• Intel shares plunged nearly 30% to $65.76 on Friday, wiping out more than $146 billion in market value as investors reacted to a disappointing fourth-quarter forecast.
• Intel expects Q4 revenue of $15 billion to $16 billion, well below Wall Street's $17.07 billion estimate, while adjusted earnings per share are forecast at $0.25 versus expectations of $0.43.
• Demand for AI server processors is booming, but manufacturing and packaging shortages are limiting production. Meanwhile, Intel expects the PC market to contract through 2027 and warned it probably won't generate positive free cash flow next year.

Intel shares plunged nearly 30% to $65.76 on Friday after the chipmaker issued a fourth-quarter forecast that fell well short of Wall Street expectations, overshadowing an otherwise strong earnings report.

The selloff wiped out more than $146 billion in market value, and translated into the worst single-day decline in more than 50 years.

The problem is that Intel finds itself in an unusual position: demand for its processors is booming because of the AI infrastructure buildout, but the company cannot manufacture enough chips to capitalize on it. At the same time, its traditional PC business is struggling, and the factories needed to support its long-term recovery are consuming enormous amounts of money.