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TL;DR
Intel reported third-quarter revenue of $16.5 billion, up 21% year over year, and 78% growth in its Data Center and AI segment. Its fourth-quarter outlook fell short of analyst expectations, however, as memory costs weigh on PC demand and the company says supply limits constrain server-chip sales; the stock dropped about 29% on Oct. 30.
Intel shares fell about 29% on Friday, Oct. 30, after the chipmaker forecast fourth-quarter revenue below analyst expectations, overshadowing a quarter in which revenue rose 21% and its Data Center and AI business grew 78%. The company cited supply constraints and higher memory prices as pressures on its outlook, highlighting how demand from AI data centers can benefit Intel’s server business while making PCs more expensive.
Intel reported third-quarter revenue of $16.5 billion, compared with $13.7 billion a year earlier, and adjusted earnings of $0.52 per share. Both beat the company’s guidance, according to its Oct. 29 results. Its adjusted gross margin was 44.1%. Revenue in the Data Center and AI segment reached $7.3 billion, up 78% from a year earlier; the segment recorded $3 billion in operating profit. Intel described the growth as its strongest for that segment in 15 years.
The forward outlook drove the selloff. Intel forecast fourth-quarter revenue of $15 billion to $16 billion, with a midpoint of $15.5 billion. Analysts had expected $17.1 billion, according to LSEG data cited by CNBC. Intel projected adjusted earnings of $0.25 per share, compared with an analyst expectation of $0.43, and an adjusted gross margin of 38%, down from 44.1% in the reported quarter.
Intel closed Friday at $65.76, down from $92.07 on Thursday. Yahoo Finance’s calculation, based on closing prices dating to May 1973, found only one worse daily decline: a nearly 30% fall on July 5, 1974. CNBC also described the move as the stock’s worst day since the 1970s. The Nasdaq Composite fell 2.9% that Friday, while other chip stocks also declined, according to CNBC.
Infographic 01 · One day, one stake
One trading day cost Washington more than it paid
Intel's stock fell about 29% on Friday after a weak forecast. Here is what that did to the shares the US government bought in August 2025, and how the price compares with what other buyers paid.
The government’s stake, on paper
433.3 million shares × price
- PaidAug 2025, at $20.47 a share$8.9B
- Thursday's close29 Oct 2026, $92.07$39.9B
- Friday's close30 Oct 2026, $65.76$28.5B
The one-day loss (about $11.4B) was larger than the $8.9B the government paid. The stake is still worth roughly three times its cost.
What different buyers paid per share
Red line: Friday’s close, $65.76
- US governmentAug 2025 · 433.3M shares$20.47
- SoftBankSep 2025 · 87M shares$23.00
- Nvidiaagreed Sep 2025 · 215M shares$23.28
- Public offeringAug 2026 · about 242M shares$95.00
2025 buyers are far above water; buyers of the August 2026 offering are about 31% below their price (my arithmetic).
Market prices as reported by Yahoo Finance and CNBC for 29–30 October 2026; no licensed price feed. Stake values: Yahoo Finance’s arithmetic with 433.3 million shares. Purchase prices from Intel’s 10-Q and the August 2025 agreement.
Sources: Yahoo Finance, 30 Oct · Yahoo Finance (stake), 30 Oct · CNBC, 30 Oct · Intel 10-Q, 30 Oct · Intel 8-K, 22 Aug 2025.
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AI Demand Pulls Intel Both Ways
The results show a split within Intel’s business: AI infrastructure is lifting demand for server processors, but the same buildout is tightening the supply of memory used in computers. Intel said rising system prices are weakening PC demand, and it expects PC-chip revenue to fall more than 20% from the third quarter to the fourth. The PC business remains a major part of the company, so strength in its data-center segment has not erased pressure elsewhere.
Supply is another constraint. The source report says Intel cannot build enough server processors to meet demand, though the extent of the shortfall was not specified in the material provided. Intel’s finance chief also warned that positive free cash flow next year is unlikely. That outlook matters to investors and customers because it points to limits on how quickly Intel can turn AI demand into shipments and financial improvement.
The fall also affected the value of the U.S. government’s Intel holding. The government acquired 433.3 million shares at $20.47 each in August 2025, for about $8.9 billion, using chip grants previously promised to Intel. The shares were worth about $39.9 billion at Thursday’s close and $28.5 billion at Friday’s close, based on Yahoo Finance calculations. The one-day decline reduced the stake’s market value by roughly $12 billion, according to CNBC, but it remained above the government’s purchase cost.
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Strong Quarter, Lower Guidance
Intel’s results reveal why a solid quarter did not reassure the market. Third-quarter performance measures sales already made; the forecast signals what the company expects in the months ahead. The company’s projected fourth-quarter revenue midpoint is $1 billion below the third-quarter result, while the expected decline in gross margin suggests lower profitability relative to sales.
Intel attributed the pressures to several factors. CEO Lip-Bu Tan said system-endpoint prices had increased significantly year to date. The source report links higher PC prices to a squeeze in memory supply as AI data centers buy large quantities. Intel also cited a deadly accident at its factory in Israel, which the report says will reduce revenue by about $300 million this quarter. The available material does not provide further details about the accident.
The stock had risen sharply earlier in 2026, nearly quadrupling from the start of the year to a record on June 22, according to Yahoo Finance’s calculations. Despite Friday’s fall, it remained nearly 80% higher for the year, while more than halving from that June peak. Those figures describe past share-price performance, not a forecast.
“Not fixed yet”
— D.A. Davidson, in a rating note reported by CNBC
Supply and PC Demand Remain Open
The available results do not quantify how much server-chip demand Intel is unable to fill or when supply could catch up. It is also unclear how long elevated memory prices will persist, how deeply they will affect PC purchases, and whether demand could recover once prices ease. Intel’s fourth-quarter forecast gives a near-term estimate, but it does not establish how quickly the company’s margins or cash flow will improve.
The source material also does not specify the factory accident’s operational effects beyond the reported estimate of about $300 million in lost quarterly revenue. Nor does it say whether outside customers will commit to using Intel’s manufacturing services. The government’s stake value is based on market prices and can change; the reported decline was not a realized loss from a sale.
Watch Shipments, Memory and Foundry Deals
The next test is whether Intel can convert data-center demand into enough server-chip shipments while meeting its fourth-quarter guidance. Investors and customers will also be watching whether higher memory costs continue to suppress PC demand and contribute to the expected margin decline. The company’s next results should show how closely its actual revenue and profitability track the forecast.
Intel’s ability to attract outside customers to its factories is another unresolved measure of progress. The source report identifies customer commitments as one of the factors to watch but gives no confirmed deals or timetable. Intel has also warned that positive free cash flow next year is unlikely, making its spending needs and cash generation part of the outlook readers will be following.
Key Questions
Why did Intel shares fall after a strong quarter?
The main trigger was Intel’s fourth-quarter forecast, which was below analyst expectations for revenue and adjusted earnings. The company also projected a lower adjusted gross margin.
How did Intel’s Data Center and AI business perform?
Segment revenue reached $7.3 billion in the third quarter, up 78% from a year earlier. Intel reported $3 billion in operating profit for the segment.
How is AI demand affecting Intel’s PC business?
The source report says data-center demand is increasing pressure on memory supply and prices, making PCs more expensive. Intel expects PC-chip revenue to fall by more than 20% from the third quarter to the fourth.
Did the U.S. government lose money on its Intel stake?
The stake’s market value fell by about $12 billion on Oct. 30, according to CNBC, but remained above its reported $8.9 billion purchase cost. A change in market value is not a realized loss unless shares are sold.
What should readers watch next?
Key indicators include Intel’s server-chip supply and shipments, the duration of high memory prices, PC demand, progress in attracting outside factory customers, and whether the company’s next results meet its guidance.
Source: ThorstenMeyerAI.com
