Why Intel's stock is sinking toward its worst day in two years - and a $128 billion wipeout

By Britney Nguyen and Nora Redmond

Intel's PC business is under pressure as memory-chip prices dent demand and as corporate IT teams have less budget for laptops

Intel could shed $128 billion in market cap if current declines hold.

Intel is on track to lose $128 billion in market capitalization on Friday as a personal-computer sales slowdown spooked investors.

The company blamed a weak PC market for a revenue forecast that came in well shy of what analysts were expecting Thursday. Intel's (INTC) outlook for the December quarter calls for between $15 billion and $16 billion of revenue, below the $17.1 billion FactSet consensus view.

PC revenue also surprisingly declined in the September quarter, helping send shares down nearly 26% in Friday's premarket trading following Intel's third-quarter earnings release, which would mark the largest one-day drop in over two years. The technology giant is on pace to shed $128 billion in market capitalization, according to Dow Jones Market Data. That would be its biggest one-day loss of market cap on record.

Shares of Advanced Micro Devices (AMD), another maker of PC chips, were down more than 8% in Friday's premarket action.

Demand has slowed for PCs as memory-chip prices have risen dramatically. Companies are also facing more limited information-technology budgets, a further factor weighing on PC demand, Intel CFO David Zinsner said on the company's earnings call.

For analysts at Jefferies, led by Blayne Curtis, it's a positive that the revenue reset was driven by softer demand for PCs rather than a change in the company's data-center and AI group's trajectory. However, they noted that Intel will likely continue to lose market share throughout next year, "making it tough to underwrite the longer-term story even with Foundry/packaging customer announcements."

The pressure on the PC market isn't exactly a shock given that surging memory prices have been a nagging issue all year, and this was broadly expected to slow demand for laptops. But the negative impact "came a little sooner and deeper than we thought," John Pitzer, Intel's corporate vice president of investor relations, told MarketWatch.

Intel's outlook was also weighed down by an explosion at one of its chip-making facilities in Israel earlier this month. Pitzer said that led to a reduction of $300 million within its fourth-quarter forecast.

David Wagner, a portfolio manager at Aptus Capital Advisors, said in emailed comments that Intel's earnings report showed while it's "losing on one front" with PC chips, it's also having trouble capitalizing on strong demand for server chips given some component shortages.

Though Intel is making progress in its chip-manufacturing business, which has been a key area of interest for investors, Thursday's report showcased "the challenges the company faces in pushing its recent turnaround into a sustained recovery," eMarketer senior analyst Asa Hiken said in comments shared with MarketWatch.

Demand for Intel's central processing units for data-center servers has surged this year as agentic artificial intelligence has taken off. That has been a boon for the company, which less than a year ago faced questions over its place in the AI world that at the time was mostly focused on graphics processing units like those made by Nvidia (NVDA).

But server CPU demand isn't enough on its own to support Intel through near-term challenges, Hiken said, namely the ongoing weakness in the PC market.

The sustainability of Intel's growth will come down largely to its foundry business, Hiken said. Intel's advanced chip-packaging technology is gaining attention from customers and is viewed by Wall Street as one of the more promising aspects of its chip-manufacturing business.

However, the costs for building chips are massive, Hiken noted, and Intel still needs to secure meaningful commitments from customers who want to use its foundry. Until then, investors will continue to question the viability of this business and the steep investments being poured into it, he added.

For a team at Morgan Stanley, led by Joseph Moore, Intel's stock isn't compelling even after its selloff. They see the company losing market share to its fabless competitors that have lower capital spending requirements, with expectations for Advanced Micro Devices, Nvidia, Graviton and Axion to all materially outgrow Intel's 30% market growth rate in CPUs in 2027.

-Britney Nguyen -Nora Redmond

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10-30-26 0727ET