Intel's shares tumbled roughly 28% on Friday, delivering one of the worst single-day drops in the company's history after it issued a softer-than-expected fourth-quarter outlook.
The slide trimmed the value of the government's 10% holding in Intel by $12 billion, CNBC reported. The Trump administration had purchased that stake a year earlier. Nvidia, which also bought a sizable position in Intel in 2025, saw its own shares dip slightly on the same day, while many technology firms, particularly chipmakers, were caught in the broader sell-off.
Despite the sharp fall, Intel remains a profitable investment for both the government and Nvidia, having risen more than 70% year-to-date, though it is far below the peak prices seen over the summer.
The downturn was triggered when Intel projected fourth-quarter revenue of $15 billion to $16 billion, below analysts' expectations of around $17 billion. The company also warned that its gross-profit margin would shrink to 37% from 43% and that heavy investment would leave it without positive cash flow.
Intel cited a slowdown in PC sales as the main issue, attributing it to the AI sector's appetite for memory and other components, which has driven PC prices higher.
"Our customers began signaling a PC slowdown based on the memory prices and availability. Year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets," Intel CEO Lip-Bu Tan said during the earnings call.
On the positive side, revenue from Intel's data-center division grew 78% compared with the same quarter last year. However, the segment remains constrained until the company can add capacity at its fabs and attract more external customers, competing with Taiwan Semiconductor Manufacturing Co. One new fab in Arizona is now operating, but the next facility is not slated to start production until 2028.
