Intel shares fell 29% on Friday, their worst day since the 1970s, after the chipmaker issued weaker-than-expected guidance. Intel attributed the outlook to a plant shutdown in Israel and ongoing softness in the PC market, according to the report.
The report says the drop cut about $12 billion from the value of the U.S. government's roughly 10% stake in Intel. The government took that stake more than a year ago under the Trump administration. Nvidia's stake fell about $6 billion in value, the report says.
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.
Finance chief David Zinsner said the company sees "the PC slowdown continuing at least through the first half of next year." He added that the company would keep investing in capacity and working capital.
The guidance also reflects an explosion at an Israeli fab earlier this month that killed two workers and seriously injured a third. Zinsner said the incident will cost about $600 million in lost revenue over two quarters. CEO Lip-Bu Tan called the explosion an "unfortunate and tragic accident" that caused an "extended shutdown" at the plant.
D.A. Davidson downgraded Intel to neutral from buy. The analysts wrote that it is "hard to justify the current multiple when weakness is so significant."
Tan said on the earnings call that "a couple of customers" would be ready to announce in the next two quarters. Intel still has no external customers for its new chips, according to the report.