Intel shares plunged 29% on Friday, their worst one-day fall since the 1970s, wiping about $12 billion off the value of the US government’s stake in the company after the chipmaker warned that a factory shutdown in Israel and a weak PC market would hit its earnings this quarter.
The sell-off dealt a heavy blow to the Trump administration, which took the 10% stake more than a year ago, and to chief executive Lip-Bu Tan’s efforts to revive the business. Nvidia, which also bought a large stake, lost about $6 billion.
The US government’s investment remained profitable overall despite Friday’s loss.
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Analysts at DA Davidson cut their rating on the stock from “buy” to “neutral” in a report titled “Not fixed yet”. “We understand the PC market is being impacted at the industry level,” the analysts wrote. “However, it is hard to justify the current multiple when weakness is so significant.”
The fall came after a strong run; Intel shares had risen about 150% this year, driven by demand for its central processors, which are becoming vital for agentic AI, where software carries out tasks with little human input. Tan, who joined in March 2025, has been trying to win back ground after Intel missed the early years of the AI boom.
Intel said it expected adjusted earnings per share of 25 cents this quarter, on revenue of between $15 billion and $16 billion. Analysts had expected revenue of $17.1 billion and earnings per share of 43 cents, according to data provider LSEG.
Intel blamed two main factors; the first was a PC market hit by soaring prices for memory and other components. Global PC shipments fell 4% in the second quarter from a year earlier, according to Counterpoint Research. “We see the PC slowdown continuing at least through the first half of next year,” finance chief David Zinsner said in the earnings release.
The second was an explosion earlier this month at an Intel chip factory in Israel, which killed two workers and seriously injured a third. Zinsner said the incident would cost about $600 million in lost revenue over two quarters.
Tan described it as an “unfortunate and tragic accident” that caused an “extended shutdown” at the plant, delaying shipments of 10-nanometre chips.
Intel was not the only technology company to suffer as the Nasdaq Composite fell 2.9%, ending a week of poor tech earnings. Alphabet fell more than 12% on Thursday, its worst day on record, and dropped again on Friday.
Amazon slipped 1.4% after missing third-quarter revenue and profit forecasts, while keeping its 2026 capital spending plan at $220 billion. It also reported negative free cash flow, the cash left after investment, for a second straight quarter. Nvidia fell 4%, Broadcom more than 5% and Qualcomm 11%.
Investors seemed to be increasingly nervous about whether huge AI spending by big tech firms will pay off. “I don’t think this is a moment of reckoning,” said Matt Orton, chief market strategist at Raymond James, told CNBC’s “Squawk Box Europe”.
“But I think it’s a moment where investors should take a long thought about how positioning across the space still remains crowded even though the fundamentals are strong,” he said.
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Intel’s recovery plan rests on its foundry business, which makes chips for other companies and has struggled to gain traction. Intel is the only US-based maker of advanced logic chips and is now in high-volume production of its most advanced 18A chip at a new factory in Arizona, giving customers an alternative to Taiwan Semiconductor Manufacturing Co (TSMC). Its next Arizona factory is due to open by the end of 2028.
The company still has no outside customers for its new chips. Tan said on the earnings call that Intel would have “a couple of customers” ready to announce in the next two quarters, and that it was making “tremendous progress” on its upcoming 14A chips.
Intel Stock Crash: Trump administration loses over $12 billion after stock suffers worst day since 1970s