Intel stock had its worst day on record Friday, dropping about 28% after the semiconductor giant issued a weaker-than-expected outlook for the fourth quarter.
The rout reduced the value of the government’s holdings in Intel by $12 billion, CNBC reported. The Trump administration ordered the government to buy a 10% stake more than a year ago. Nvidia also acquired a large stake in Intel in 2025, but its stock price also fell slightly on Friday. Much of the tech industry, especially chipmakers, was caught up in the crash.
Although Intel’s stock price has fallen significantly from its sky-high highs over the summer, it remains a good investment for the government (and Nvidia) so far, as it’s up more than 70% for the year.
The fear came after Intel warned that it expected fourth-quarter revenue to be between $15 billion and $16 billion, when analysts were expecting about $17 billion. It also warned that the company’s gross profit margin would fall from 43% to 37%, and said it did not expect positive cash flow due to large investments.
The main problem for Intel is that PC sales are hurting as the AI industry eats up memory and other components, driving up PC prices.
“Our customers have begun to see slowdowns in their PCs based on memory price and availability. Year-to-date system endpoint prices have increased significantly, putting additional pressure on already limited IT budgets,” Intel CEO Lip-Bu Tan warned on a conference call.
On the bright side, revenue from Intel’s data center business increased 78% year over year. But that is holding it back until it can bring more capacity to its own fabs and book more external customers to compete with powerhouse Taiwan Semiconductor Manufacturing. One of Intel’s new fabs in Arizona is operational, but the next one isn’t expected to open until 2028.
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