Intel’s stock crashes, knocking $12B from government’s stake
techcrunch ·
Intel's stock plummeted by approximately 28% on Friday, marking one of its worst trading days ever after the company reported a weaker-than-expected fourth-quarter outlook. This sharp decline reduced the value of the U.S. government's 10% stake in Intel by $12 billion, although the investment remains profitable overall with gains exceeding 70% for the year. The selloff was triggered by Intel warning that Q4 revenue would fall between $15 billion and $16 billion, below analyst expectations of $17 billion, alongside a projected drop in gross profit margins to 37%. CEO Lip-Bu Tan attributed the slowdown in PC sales to rising component prices driven by the AI industry's high demand for memory and other resources. While Intel's data center business saw significant growth of 78% year-over-year, expansion is currently hampered by limited fab capacity and competition from Taiwan Semiconductor Manufacturing Co. Nvidia also experienced a slight stock drop as much of the tech sector, particularly chipmakers, participated in the broader market sell-off. Despite the recent volatility, Intel's new Arizona fab is operational, though additional capacity is not expected until 2028.
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