Intel stock closed down 28.58% on Friday, its worst day since the 1970s and wiping ~$12B off US government's stake, after issuing weaker-than-expected guidance (CNBC)

Intel's stock plummeted by 28% on Friday, wiping out $12 billion in value for the U.S. government, according to CNBC. The company had issued a weaker-than-expected outlook for the fourth quarter, leading to the significant drop in its share price. The Trump administration had invested 10% of its stake in Intel a year ago. Nvidia, which also held a substantial stake in Intel in 2025, experienced a minor decline in its stock value as well.

The tech industry, particularly chipmakers, felt the impact of the sell-off. Intel's stock, however, remains a profitable investment for both the government and Nvidia, having increased by over 70% throughout the year, despite its sharp decline from the summer's peak prices. Intel had forecasted revenue between $15 billion and $16 billion for the fourth quarter, whereas analysts expected around $17 billion.

The company also indicated that its gross profit margin would decrease from 43% to 37%, and it expected no positive cash flow due to heavy investments. The primary challenge for Intel stems from the AI industry's consumption of memory and other components, resulting in rising PC prices. Intel CEO Lip-Bu Tan expressed concern on the earnings call, stating that customer signals indicated a PC slowdown due to memory prices and availability.

Year-to-date system endpoint prices have surged significantly, placing additional strain on limited IT budgets. Despite the setback, Intel's data center business revenue grew by 78% compared to the previous year. However, the company faces limitations in this area until it ramps up capacity at its fabrication facilities and secures more external customers, competing with industry leader Taiwan Semiconductor Manufacturing Co. One of Intel's new fabrication plants in Arizona is now operational, but the next one is not expected to commence production until 2028.