Technology & Hacking · VIDEO
Intel falls by 28%: impact on government investments and tech sector
Intel experienced one of its worst days in the stock market with a 28% plunge, reducing the value of government investments by $12 billion. The decline was caused by a disappointing outlook for the fourth quarter, with revenue forecasts below expectations and falling profit margins. The tech sector, particularly chipmakers, was hit by a general sell-off. Nevertheless, Intel remains a profitable investment for the government and Nvidia, with a 70% increase in 2026. The 78% growth in the data center business offers a ray of hope, but limited production capacity and competition with TSMC pose significant challenges.
KEY TAKEAWAYS
- Intel lost 28% in a single day, reducing the value of government investments by $12 billion.
- Revenue forecasts for the fourth quarter were below expectations, with a profit margin falling from 43% to 37%.
- The slowdown in PC sales, caused by the increase in AI component prices, contributed to the crash.
- Intel's data center business grew by 78%, but limited production capacity and competition with TSMC are obstacles.
- Despite the crash, Intel remains a profitable investment for the government and Nvidia, with a 70% increase in 2026.
Transcript
Intel shares plummeted 28% last Friday, marking one of the worst single-day collapses in the company's history. The drop came after Intel announced a below-expectations outlook for the fourth quarter, reducing the value of the government's holdings by $12 billion.
The main causes of the collapse include disappointing revenue forecasts, a drop in gross profit margin from 43% to 37%, and no positive cash flow expected for Q4. Intel anticipates revenues between $15 and $16 billion for the fourth quarter, significantly below the $17 billion expected by analysts.
Despite these challenges, Intel's data center sector saw a 78% growth compared to the previous year. However, this growth is limited by production capacity constraints. Intel's new factory in Arizona is operational, but the next one is not expected until 2028.
The collapse also impacted Nvidia, which had acquired a significant stake in Intel in 2025, although its shares declined less pronouncedly. Despite the recent drop, Intel's shares remain positive for the year, with an increase of over 70%.
Intel faces structural challenges, including fierce competition in the semiconductor sector and the need to increase production capacity. The company must carefully manage operating costs and continue investing in research and development to maintain its market position.
The semiconductor sector is experiencing rapid demand growth driven by artificial intelligence and edge computing, but supply chain bottlenecks and production capacity remain limiting factors.
