Intel shares fell 29% on Friday, heading for their worst day since 1974, after the chipmaker issued weaker-than-expected guidance. The company cited a plant shutdown in Israel and ongoing softness in the PC market.
The stock was on pace for its second-steepest drop on record. CEO Lip-Bu Tan, hired in March 2025, has been working to revive the company after it missed the early years of the artificial intelligence boom.
The U.S. government took a 10% stake in Intel more than a year ago. The value of those holdings dropped by about $12 billion on Friday, according to the report. Nvidia also holds a large Intel stake and faces a drop of about $6 billion in its value, the report said.
Intel said it expects adjusted earnings of 25 cents per share this quarter, on revenue between $15 billion and $16 billion. Analysts expected revenue of $17.1 billion and earnings of 43 cents per share, according to LSEG.
Intel finance chief David Zinsner said in the release: "We see the PC slowdown continuing at least through the first half of next year."
The report links the PC weakness to soaring costs for memory and other components. Counterpoint Research said global PC shipments fell 4% in the second quarter from a year earlier.
Zinsner said an explosion at an Israel fab earlier this month killed two workers and seriously injured a third. He said the incident will cost the company about $600 million in lost revenue over two quarters. Tan called the explosion an "unfortunate and tragic accident" that caused an "extended shutdown" at the plant.
Analysts at D.A. Davidson downgraded Intel to neutral from buy, in a report titled "Not fixed yet." The analysts wrote: "However it is hard to justify the current multiple when weakness is so significant."
Intel has no external customers yet for its new chips. Tan said on the call that "a couple of customers" would be ready to announce in the next two quarters.