Intel Shares Plunge More Than 20% After Israel Factory Blast and PC Slowdown Cloud Fourth-Quarter Outlook

Intel's stock tumbled more than 20% in after-hours trading on October 29, 2026, after the chipmaker issued a sharply weaker forecast for the fourth quarter, compounding an already difficult stretch for the company. The selloff pushed shares below $76, their lowest level since April, and threatened to mark Intel's worst single-day drop in two years.

For Q3 2026, Intel actually beat Wall Street expectations, reporting revenue of $16.5 billion, up 21% year over year, and adjusted earnings per share of $0.52, well ahead of the analyst consensus of $0.41. CFO Dave Zinsner highlighted what he called the company's strongest data center revenue growth in 15 years. But the better-than-expected quarter was overshadowed by a grim fourth-quarter guide: Intel projected adjusted EPS of just $0.25 for Q4, far below the $0.43 consensus, dragged down by two compounding problems.

The first was a sharp deterioration in PC demand. CEO Lip-Bu Tan told analysts that "the pace of the PC correction has accelerated over the last two months." Intel now expects industry PC units to fall roughly 12% in 2026, with second-half units down more than 20%, and projects a further 10% decline in 2027. Intel's own client revenue is expected to drop more than 20% sequentially in Q4. The broader PC market is being squeezed by elevated memory chip prices from suppliers including Samsung, SK Hynix and Micron, which have driven up laptop and desktop prices and suppressed end-user demand.

The second blow came from an explosion on October 14, 2026 at Intel's Fab 28 semiconductor plant in Kiryat Gat, southern Israel, which killed two workers and seriously injured a third. The blast forced an unexpected factory shutdown that disrupted data center chip supply at a moment when Intel was otherwise positioned to benefit from surging server CPU demand. Zinsner said Intel expects the industry to remain supply constrained in server CPUs throughout 2027 and into 2028, with industry server CPU units now projected to grow more than 30% in both 2026 and 2027.

Tan struck a forward-looking note, saying Intel's 18A-P chipmaking technology remains on track for launch by year-end and that the company is engaged with "a couple" of highly strategic external customers for the process. He also projected the server CPU total addressable market could expand fivefold over five years, from roughly $40 billion today to more than $200 billion, driven by agentic AI workloads. The stock's after-hours losses rippled into the broader technology sector, where concerns about AI spending returns had already sent the Nasdaq 100 down 1.4% during the regular session, with Alphabet falling 12% on disappointing sales.