Intel share price falls 29% in worst day since 1970s, wiping $12 billion off US stake

The Intel share price fell 29% on Friday, the chipmaker’s steepest single-day drop since the 1970s, after it warned that this quarter’s earnings would take a hit. The slide erased roughly $12 billion from the value of the US government’s stake of about 10% in the company. Nvidia, another large shareholder, saw its holding shrink by about $6 billion. Before Friday, the stock had climbed about 150% this year.

Why the Intel share price fell

Intel pointed to two problems. First, demand for personal computers has weakened as memory and other parts have become much more expensive. Counterpoint Research estimates that worldwide PC shipments were 4% lower in the second quarter than a year ago, and chief financial officer David Zinsner expects the weakness to last until at least the middle of next year.

Second, an explosion this month at one of Intel’s chip plants in Israel left two workers dead and one badly hurt. Zinsner put the cost at roughly $600 million of revenue lost across two quarters. Chief executive Lip-Bu Tan described it as a tragic accident that forced a long shutdown and held up deliveries of 10-nanometre chips.

Key numbers

• One-day fall: 29%, the biggest since the 1970s
• Drop in value of the US government’s stake: about $12 billion
• Hit to Nvidia’s stake: about $6 billion
• Current-quarter guidance: adjusted EPS of 25 cents, revenue of $15–16 billion
• What analysts expected (LSEG): EPS of 43 cents, revenue of $17.1 billion

Foundry business and what comes next

Intel is betting its turnaround on contract manufacturing, building chips for other companies. It is the only American company making advanced logic chips, and its newest 18A chips are now in volume production at a new plant in Arizona, with a second Arizona plant planned by the end of 2028. What it still lacks is an outside customer for these new chips, and that is the key test investors are tracking.

Wider tech sell-off

The tech-heavy Nasdaq Composite lost 2.9% on the day, capping a week of disappointing results from big technology companies. On Thursday, Alphabet had its worst session ever, down more than 12%. Amazon dropped 1.4% after falling short of forecasts and burning cash for a second quarter in a row. Nvidia lost 4%, Broadcom over 5% and Qualcomm 11%.

Doubts are growing over whether the huge sums big tech is spending on AI will earn a return. Matt Orton of Raymond James said many investors are still crowded into the same tech trades despite solid underlying business results.

For more on large companies’ quarterly numbers, see more results news.