Intel Plunges 25% on Weakest Quarterly Outlook in Decades as PC Slump Deepens and Cash Burn Looms

Intel shares collapsed as much as 26% in premarket trading on Friday, putting the stock on pace for its worst single session since 1974, after the chipmaker issued fourth-quarter revenue guidance of $15 billion to $16 billion, roughly $1.5 billion below Wall Street's expectations, with gross margins projected at just 38%. The company also warned it will burn cash for the full year and may not generate positive free cash flow in 2027, alarming investors already anxious about the cost of the AI infrastructure buildout. Intel beat third-quarter earnings estimates by $0.11 per share and reported in-line revenue, but the forward guidance was severe enough to overshadow those results entirely.

The core problem is a PC market that Intel's own management said slowed "sooner and deeper" than anticipated. Fourth-quarter PC shipments are expected to fall 25% to 30% quarter over quarter, compounding a 14% sequential drop in notebook shipments in the third quarter. A shutdown of Intel's Israel manufacturing plant added an estimated $300 million revenue hit. Meanwhile, OEM inventory levels have risen to 7 to 10 weeks, up from 6 to 9 weeks at the end of the third quarter, with further accumulation expected. Korean memory suppliers are planning to cut PC DRAM shipments by more than 40% year over year in 2027, accelerating a broader shift away from the PC supply chain.

Bank of America analyst Vivek Arya downgraded Intel to Neutral, warning of a "multi-quarter" challenge as data center strength is offset by a sharper-than-expected PC collapse. Arya noted that Intel's products are "not yet technically competitive against AMD and ARM-based rivals" growing two to four times faster, and that the foundry business has not communicated sufficient traction with external customers. Baird cut its price target, and Needham maintained its Hold rating, citing persistent PC headwinds. On the positive side, Intel sees the server CPU total addressable market growing to more than $200 billion over five years, driven by agentic AI demand, though substrate supply constraints remain a bottleneck. A leaked report also surfaced describing a new ultra-low-power chip called Moon Lake, built on Intel's 18A process with a 6-watt base power, though Intel has not confirmed the product.

The selloff spread across the semiconductor sector and broader markets. AMD fell roughly 8% in premarket trading, Nvidia dropped 2.8%, and Broadcom slid nearly 4%. Nasdaq-100 futures tumbled more than 2%, extending a rout that began earlier in the week when Alphabet's results triggered a roughly half-trillion-dollar wipe-out. Amazon compounded the damage by reporting negative free cash flow for a second consecutive quarter and signaling higher AI capital expenditure, with its shares down about 7%. At the premarket lows, Intel appeared set to surrender approximately $128 billion in market capitalization at the opening bell, and the stock is down roughly 43% for October, the worst performer in that period among major technology names.