Key Points
Intel's third-quarter revenue rose 21% to $16.51 billion, and adjusted earnings of 52 cents a share beat the 40 cents Wall Street expected. Data center and AI sales jumped 78% to $7.3 billion.
Its fourth-quarter forecast of $15 billion to $16 billion fell well short of the roughly $17 billion analysts were looking for, partly because of a deadly explosion at its Fab 28 plant in Israel.
Intel stock fell 28.6% on Friday to $65.76, its worst day since 1974, erasing roughly $140 billion in market value.
The chief financial officer said Intel probably won't generate positive free cash flow next year, just weeks after it sold $20 billion of new stock at $95 a share.
Chip stocks sank with it: Qualcomm fell about 11%, Astera Labs about 12% and Nvidia about 4% in midday trading, while the Nasdaq fell 2.9%.
On Friday, Intel learned what happens when a stock priced for a comeback delivers anything less than perfection.
The company beat Wall Street's earnings estimate by 12 cents a share. Its data center business grew 78% in a year. Its new manufacturing process is getting cheaper to run every quarter.
And the stock just had its worst day since 1974.
Intel fell 28.6% to close at $65.76, wiping out roughly $140 billion of market value in a single session. Shares had closed at $92.07 on Thursday.
The Quarter Was Better Than the Reaction
Start with what Intel actually reported.
Revenue came in at $16.51 billion, up 21% from a year ago and in line with the $16.5 billion analysts expected. Adjusted earnings of 52 cents a share more than doubled from 23 cents a year earlier.
The standout was Data Center and AI, the group that sells server processors. Revenue there hit $7.3 billion, up 78%, and management said it grew 17% from the prior quarter alone.
Intel Foundry, the contract manufacturing arm that is supposed to anchor the turnaround, still lost $1.9 billion. But that loss shrank by $236 million from the prior quarter. Costs on the company's newest 18A process have fallen roughly 40% since the first quarter, according to the earnings call.
On a normal day, that is a quarter investors reward.
The Forecast Broke the Spell
The problem was the next three months.
Intel guided fourth-quarter revenue to between $15 billion and $16 billion. Analysts had been looking for roughly $17 billion. At the $15.5 billion midpoint, Intel expects adjusted earnings of just 25 cents a share, less than half of what it just earned.
Part of the shortfall came from tragedy. An explosion at Intel's Fab 28 plant in Kiryat Gat, Israel, earlier this month killed two employees and forced a shutdown. CFO David Zinsner said the incident would cut fourth-quarter revenue by about $300 million and gross margin by about 2 percentage points, with a similar revenue hit in early 2027. Almost all of the lost sales are older 10-nanometer server chips.
The rest came from personal computers. Sales in Intel's client and PC group fell 5% from a year ago, and the company warned that softness would continue.
Then came the line that sealed it. Asked about cash flow, Zinsner said next year is "an investment year," and Intel will "probably not" have positive free cash flow as it ramps 18A and Intel 3 and prepares 14A for production in 2028. Capital spending will "rise strongly" in 2027, he added.
That is a hard message to deliver less than three months after asking investors for money. In August, Intel sold about $20 billion of new stock at $95 a share. Friday's close puts every one of those buyers deep underwater.
How a Rocket Ship Ran Out of Room
The violence of the drop makes more sense when you remember where Intel started.
The stock opened 2026 in the high $30s. By June 30, it had hit $142.35, powered by the server-chip rebound, the foundry story and big outside investments from the U.S. government and Nvidia. Even in early October, Intel was still up nearly 200% for the year.
When a stock nearly quadruples in six months, it is priced as if the comeback is complete. Friday's forecast reminded investors it isn't. Even after the crash, Intel remains well above where it began the year, but it is now more than 50% below its June peak.
The U.S. government, which holds a large equity stake, saw that stake lose about $10 billion or more in value Friday, according to Yahoo Finance and NDTV Profit, though the investment remains well in the black.
The Damage Spread Across Chips
Intel did not fall alone.
The VanEck Semiconductor ETF slumped 7% at midday, according to CNBC. Qualcomm dropped about 11%, Astera Labs about 12% and Nvidia about 4%. Micron slid more than 5%, and Arista Networks fell almost 8%. Sandisk fell 12% even after beating earnings estimates and announcing an eight-for-one stock split.
It is a pattern we have flagged before: the market graded two AI giants and misread one. Good numbers are no longer enough. Investors want proof that the spending pays off, and they are selling first and asking questions later. Just ask NXP, which beat on every line and still opened down 6%, or Texas Instruments, whose AI business nearly doubled while the stock sat well below its high.
There were bright spots. Regeneron jumped 11% after crushing estimates, earning $20.07 a share against the $16.42 expected. But the money leaving chip stocks overwhelmed everything else.
Overall, the Nasdaq fell 2.9% and the S&P 500 fell 1.8% on Friday.
What Lands Next
Next week may be the busiest of the fall.
Apple and Palantir report after the close on Monday. AMD, the week's biggest chip report and Intel's closest rival, follows Tuesday after the bell. It has guided to about $13 billion in revenue, up from $11.5 billion in the second quarter.
Tuesday is also Election Day, with control of Congress at stake in the midterms. And on Friday, the October jobs report is expected to show about 55,000 new jobs, with unemployment holding at 4.2%.
For Intel, the turnaround story is not dead. The data center numbers are real, and the factories are getting more efficient. But Friday proved that a stock priced for a miracle has no room for a stumble, and the next proof point is now months away.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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