Intel stock crash erases $12 billion from government stake

Intel shares suffered a massive drop on Friday, falling roughly 28 percent. The sharp decline followed a disappointing financial forecast for the fourth quarter. The market rout wiped $12 billion off the value of the government’s stake, which was acquired by the Trump administration over a year ago. Other major industry players, including Nvidia, also experienced stock dips during the wider tech sector sell-off.

Weak Forecast and Rising Component Costs

The company projected fourth-quarter revenue between $15 billion and $16 billion, falling short of analyst expectations of $17 billion. Gross profit margins are also expected to shrink, and heavy investments mean the firm anticipates no positive cash flow. Leadership pointed to high memory prices and component shortages, driven by heavy demands from the artificial intelligence sector, which are slowing down traditional personal computer sales.

Data Center Growth and Manufacturing Limits

Despite struggles in the personal computer market, the data center division saw revenue jump 78 percent compared to the previous year. However, growth is limited by current manufacturing capacity and the need to attract more external clients for its fabrication plants. While an Arizona facility is running, a newer plant will not launch until 2028, leaving the firm to compete against major industry rivals.