Intel plunges 29%, dragging global chip stocks into broad selloff

Key Points

1. Intel fell 29% Friday, on track for its steepest one-day drop ever.
2. The chipmaker guided fourth-quarter revenue below Wall Street estimates as PC demand stays weak.
3. More than $137 billion in market value is at stake, testing CEO Lip-Bu Tan's turnaround.

The latest:

A 29% collapse in Intel shares on Friday put the chipmaker on course for its worst single trading day on record, wiping out more than $137 billion in market value, according to Reuters. The slide spread across semiconductors and server makers on both sides of the Atlantic, after Intel guided fourth-quarter revenue well below analyst expectations and warned of a sharp drop in PC chip sales.

Details:

• The guidance: Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below the $17.07 billion analysts expected on average, according to data compiled by LSEG. Finance chief David Zinsner said the company does not expect positive cash flow this year.
• The PC problem: PC chips made up roughly half of Intel’s third-quarter revenue. The company expects sales from that segment to fall more than 20% sequentially this quarter, after a 5% decline in the September period, Reuters reported.
• Memory squeeze: Higher memory prices are compounding the weakness. Suppliers are shifting capacity toward AI-focused high-bandwidth memory chips, pushing up the cost of building PCs and pressuring consumer demand that was already soft.
• Chip contagion: Advanced Micro Devices, Arm Holdings, Qualcomm, Nvidia, Broadcom and Micron all fell between 2% and 10% as the selloff widened beyond Intel into the broader semiconductor complex.
• Server makers hit: Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer dropped between 6% and 10%, reflecting investor caution toward companies tied to the semiconductor and AI infrastructure supply chain.
• Europe and Asia: The STOXX Europe 600 Technology Index fell 2%, with sector heavyweight ASML shedding 4.6%. US-listed shares of TSMC, the world’s largest contract chipmaker, dropped 3.3%.
• Analyst reading: Matt Britzman, senior equity analyst at Hargreaves Lansdown, said markets were in a “sell first, ask questions later” mood and that Intel’s warning handed investors an easy reason to pull money out of chip stocks broadly.
• The offset question: Brian Mulberry, chief market strategist at Zacks Investment Management, said it will matter whether Intel can expand supply of its highly profitable Xeon server products to offset the developing weakness in PCs.
• Pressure on earnings: Mulberry added that weaker sales volumes, higher manufacturing costs and an out-of-cycle product mix point to further near-term stock declines, with future earnings under heavy pressure.

Background:

Intel is mid-turnaround under CEO Lip-Bu Tan, pairing heavy spending on AI and manufacturing expansion with a legacy PC business that still supplies about half its revenue. Friday’s guidance showed that older business shrinking faster than the new investments can compensate.

Between the lines:

Two forces are colliding in the same quarter. The AI buildout that is lifting memory makers is also raising component costs for PCs, so the boom financing Intel’s expansion is simultaneously eroding the segment funding it. The spread of selling to Dell, HPE and ASML suggests investors read Intel’s warning as a signal about AI-related capex across the supply chain, not an Intel-specific stumble.

What’s next

Watch whether Intel can lift Xeon server supply to cushion the PC decline, and whether fourth-quarter revenue lands inside the $15–16 billion guidance range. Further moves in ASML, TSMC and Micron will show if the selloff was sector-wide or Intel-specific.