Intel Shares Crash Most On Record
Summary:
- Intel Shares Crash Most On Record
- Intel Crashes 25% As "Surprisingly Severe PC Correction" Shocks Wall Street
Shares Crash
Intel shares cratered about 29.7% during regular US trading, marking their steepest intraday decline in Bloomberg data going back to 1982. The selloff eclipsed the August 2024 earnings collapse and the stock’s worst single-session drops during the Covid panic, global financial crisis, dot-com bust and 1987 crash.
Earnings
AI infrastructure stocks tumbled in premarket trading in New York after disappointing results from Amazon and Intel. Amazon is down about 7% following Thursday's earnings report, as cash burn surged and weak guidance spooked investors.
Shifting focus to Intel, shares are down 25% in premarket trading. If losses carry into the cash session and exceed 26%, the stock could be on track for its worst intraday decline in Bloomberg data going back to 1982.
For traders just waking up to the Intel bloodbath on their terminals, Thursday's outlook fell well below Bloomberg consensus expectations as weak PC demand and supply constraints overshadowed surging data-center sales.
Intel expects fourth-quarter revenue of $15 billion to $16 billion, compared with analysts' estimates of $17.05 billion. Adjusted earnings are projected at 25 cents a share versus expectations of 43 cents, while adjusted gross margin is forecast at 38%, below the 42.8% consensus.
The weak outlook overshadowed third-quarter adjusted earnings of 52 cents a share, which beat estimates of 41 cents. Revenue rose 21% to $16.51 billion, roughly matching expectations.
The results showed a massive divergence between Intel's businesses: Data Center & AI revenue surged 78% to $7.32 billion in the third quarter, exceeding the $6.67 billion estimate. But Client Computing sales fell 5.1% to $8.10 billion, missing expectations of $8.82 billion.
"Despite near-term headwinds affecting the broader PC industry, we continue to see robust demand for CPUs and more broadly, for all our computing platforms in the long term," CEO Lip-Bu Tan said.
CFO David Zinsner said, "Looking ahead, we see the PC slowdown continuing at least through the first half of next year."
Morgan Stanley analysts called the quarter a setback driven by a "surprisingly severe PC correction" and company-specific server issues. They also said, "Server CPU also slightly lower amid supply issues around the Israel fab accident and the ongoing substrate shortage."
Vital Knowledge analysts called the outlook "pretty horrible, and the stock will undoubtedly get crushed, although it would be much worse if Data Center/AI caused the weakness (it's not) as opposed to PCs."
"AI, which is why people are bulled up on INTC, is killing PCs, a business that still contributes a big chunk of the company's top line, as the data center boom drives up the price of memory, causing ASPs to rise which is hurting demand," Vital Knowledge analysts said.
Citi semiconductor analyst Atif Malik offered clients his first take on the earnings and outlook:
Intel reported strong beat in the Sep-Q but provided weak Dec-Q outlook due to: a) an accident-causing Fab 28 shutdown in Israel or ~$300M/~200bps revs/GM% impact in both Q4/Q1, b) weaker PC demand, and c) supply availability.
Overall, we remain believers in Intel technology and Lip-Bu's foundry vision but expect the debate on the stock to shift more towards Intel's ability to unlock enough manufacturing capacity and external foundry customers fast enough to translate strong data center demand into earnings growth.
We cut our CY26/27/28 EPS sharply ~27c/96c/$1.69 and lower TP to $100 on revised SOTP analysis. Keep Buy.
Here is Goldman's take:
INTC: DCAI Revenues solid, but focus on PC weakness (and cautious forward commentary) driving 4Q guide below. Stock -25% in pre.
Quarterly results were above the Street: Intel reported revenue of $16.5 bn, below GS at $17.0 bn and in line with the Street at $16.4 bn. Gross margin of 44.1% was well above GS at 42.7% and the Street at 41.9%. Operating margin of 19.6% was above GS at 17.9% and the Street at 16.5%. Reported non-GAAP operating EPS of $0.52 was above GS at $0.47 and the Street at $0.39. CCG revenue of $8.1 bn was below GS at $9.0 bn and the Street at $8.9 bn. DCAI revenue of $7.3 bn was above GS at $7.1 bn and the Street at $6.6 bn. Intel Foundry revenue of $6.7 bn was above GS at $6.1 bn and the Street at $6.0 bn.
Datacenter CPU strength: Intel's DCAI segment grew 17% QoQ and 78% YoY, driven by strength in general-purpose server demand as well as agentic AI. Going forward, Intel sees an accelerating server CPU market being driven by agentic AI with sustained unit strength and higher ASPs - with units expected to grow over 30% in 2026 and 2027 - and a TAM of ~$200bn by 2030. The company expects to see mid-teens sequential growth in DCAI for 4Q as additional supply comes on line, as the company continues to run in a capacity shortage position.
Weakening PC market: Management pointed to a meaningfully weaker PC environment extending into 2027, with limited IT budgets, elevated inventories and memory constraints weighing on demand. Intel expects 2026 PC units to decline ~12%, followed by another ~10% TAM decline in 2027, with the weakness skewed toward 1H as customers aggressively reduce purchases to align inventory with consumption. Client revenue is expected to fall ~20% QoQ in 4Q, with the inventory correction extending through 1Q and potentially into 2Q, alongside normal seasonal pressure…
4Q guidance is well below the Street. Intel guided 4Q revenue and gross margin well below the Street. Revenue was guided to $15.5 bn at the midpoint, which is well below GS at $18.0 bn and the Street at $17.0 bn. Non-GAAP gross margin was guided to 38%, which is far below GS at 43.6% and the Street at 42.5%. Non-GAAP EPS was guided to $0.25 which is also below GS at $0.46 and the Street at $0.43. GIR full note
Intel shares plunged 25% in premarket trading.
If losses exceed 26% by the close of the cash session, the decline could mark the stock's worst single-day performance in Bloomberg data going back to 1982.
Analysts tracked by Bloomberg have an average 12-month price target of $95.42.
Read: "The Great Tech Unwind: Nasdaq Hits Make-Or-Break Levels."