Intel shares plummet more than 20% following weak guidance blamed on PC market slowdown

Intel's stock suffered a significant drop of over 20% following the company's weak guidance, attributed to a slowdown in the personal computer market. Despite beating expectations in the previous quarter, the company's forecast for the current period sparked panic among investors. Intel reported third-quarter earnings of 52 cents per share, surpassing Wall Street's guidance of 40 cents per share, with revenue for the quarter increasing by 21% to $16.51 billion.

However, the company's client computing and physical AI business struggled, with revenue for these sectors falling 5% to $8.1 billion. The data center and AI unit, however, saw a surge in revenue by 78%, reaching $7.3 billion. The PC market downturn, driven by rising memory and component costs, was the primary reason for the weak guidance.

Intel projected fourth-quarter earnings of about 25 cents per share, with revenue expected between $15 billion and $16 billion, far below analysts' targets. The company's finance chief, David Zinsner, stated that the PC slowdown would continue until at least the first half of next year. Intel also suffered a tragic loss when an explosion at one of its chip fabrication plants in Israel killed two workers and injured a third.

This incident is estimated to cost the company $600 million in lost revenue over the next two quarters. Despite the challenges, Intel remains optimistic about the long-term demand for its CPUs, particularly in the era of agentic AI workloads where its chips are in high demand.