Intel stock plunges 29%. Analysts urge caution on buying the dip

Intel's stock price plummeted nearly 30% on Friday, marking its worst day in 52 years. This steep decline follows a record-high surge earlier in June, driven by the demand for CPUs powering advanced artificial intelligence. Despite beating earnings estimates and reporting a significant increase in data center revenue, Intel's forecast for the final quarter of the year fell short.

Analysts predicted about $17 billion in revenue, while Intel only anticipates between $15 billion and $16 billion. The primary culprit is the high demand for memory in AI data centers, which has driven up the prices of laptops and desktops, leading to a projected 12% drop in PC shipments for 2026 and an additional 10% decline in 2027.

The forecast also accounts for a recent factory shutdown at Intel's facility in Kiryat Gat, Israel, resulting from a deadly explosion. The company's stock was downgraded to neutral by several major financial institutions, and the US government's 10% stake saw a $12 billion decrease in paper value. Despite the turmoil, Intel's shares remain valued over three times their 2023 price.

This stock slide follows Alphabet's record single-day loss and Meta's underwhelming earnings, all currently trading below their 52-week highs. Samsung and SK Hynix, major memory producers, also saw declines, contributing to a 3.5% drop in South Korea's KOSPI index. The memory boom impacting Intel's PC business is now affecting its largest supporters in the tech sector.

For consumers looking to purchase a PC, there are no signs of reduced hardware costs in the near future, with memory prices potentially continuing to rise until 2028.