Intel shares dropped nearly 30% to $65.15 on Friday morning, erasing more than $100 billion of the chipmaker’s market value, after it forecast fourth-quarter revenue roughly $1.57 billion below what Wall Street expected.

Hours earlier, Intel had reported that its data center and AI business grew 78%, its fastest pace in 15 years. The market did not care. It was looking at the PC business, and at what the AI boom is doing to it.

Why 78% AI Growth Could Not Save Intel’s Forecast

The quarter itself beat estimates, with revenue up 21% to $16.5 billion, according to Intel’s results. The punishment is for the forecast, not the quarter.

Intel guided fourth-quarter revenue of $15 billion to $16 billion. Analysts had modeled roughly $17 billion.

The PC chip division, which brought in $8.1 billion last quarter, is where the hole opens. Intel expects its revenue to fall more than 20% in the fourth quarter.

“…strong server demand runs into manufacturing and packaging constraints. Intel cannot simply turn every extra order into an extra shipment…PC makers face expensive, scarce memory chips and weaker sales. They are reducing inventory. Intel expects its PC-focused division’s revenue to fall more than 20% from the third quarter to the fourth,” noted analyst Shanaka Anslem.

Here is the twist. AI data centers are swallowing the world’s memory chips, so laptops cost more and buyers walk away. The same boom that filled Intel’s server order book is starving its biggest division.

“We see the PC slowdown continuing at least through the first half of next year,” Intel CFO David Zinsner noted.

A fatal explosion at Intel’s Kiryat Gat factory in Israel on October 14 adds about $300 million to the fourth-quarter hit, by Intel’s estimate.

Add that back and the gap to Wall Street is still $1.27 billion.

Is This Intel’s Worst Trading Day on Record?

The stock has fallen this hard only twice before, by 29.9% in July 1974 and by 26.1% in August 2024. A close below about $64.50 would make Friday the worst day in Intel’s history.

The bond market is rattled too. The cost of insuring Intel’s debt against default for five years jumped to a record 123.5 basis points on Friday, its biggest one-day move since October 2022, according to Markit data.

Yet there is a case the panic is overdone.

Intel started 2026 at $39.38, according to Yahoo Finance data, so even at $67 the stock is up about 65% this year.

Intel Stock (INTC) Stock Performance in 2026. Source: Yahoo Finance

CEO Lip-Bu Tan told investors on Thursday’s call that “rebuilding Intel is going to be a multiyear journey.”

What decides the next move is memory prices. Intel says the PC slump only ends when memory supply normalizes, and the debate over whether AI spending is real demand or a bubble now reaches the firms building the hardware.

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