Intel shares fell nearly 30% to $65.76 on Friday, erasing more than $146 billion in market value after the chipmaker issued a fourth-quarter outlook well below Wall Street expectations. The decline marked the company’s worst single-day drop in more than 50 years, despite strong third-quarter results and surging demand for its data-center and artificial-intelligence processors.
Strong quarter, weak outlook
Intel reported third-quarter revenue of $16.5 billion, up 21% from a year earlier. Adjusted earnings per share came in at $0.52, exceeding both the company’s $0.38 guidance and analysts’ $0.40 estimate. Chief Financial Officer Dave Zinsner said the result represented Intel’s eighth consecutive quarter of beating its financial expectations.
The company’s Data Center and AI division was the main source of strength. Revenue reached $7.3 billion, an increase of 78% year over year, while operating profit rose to $3 billion. That profit represented 42% of the division’s revenue.
Investors, however, focused on the numbers for the quarter ahead. Intel forecast fourth-quarter revenue of $15 billion to $16 billion. At the midpoint, $15.5 billion, the projection is approximately $1.6 billion below Wall Street’s $17.07 billion estimate. Adjusted earnings per share are expected to be $0.25, compared with analysts’ forecast of $0.43.
Intel also expects its non-GAAP gross margin to fall to 38% in the fourth quarter from 44.1% in the third. Gross margin measures the portion of sales left after the direct costs of producing goods have been deducted, making the expected decline an indication of pressure on the economics of the business.
According to Decrypt, investors’ reaction reflected the gap between Intel’s strong demand environment and its ability to supply products profitably and at scale.
Manufacturing limits AI opportunity
The artificial-intelligence infrastructure boom has increased demand for server processors, but Intel said manufacturing and packaging shortages are preventing it from producing enough chips to meet that opportunity. The company is therefore confronting a problem that differs from a simple lack of demand: customers want more products, while production capacity is constrained.
Intel identified three major factors behind the expected deterioration in the fourth quarter. The PC market is weakening, manufacturing constraints are affecting server processors, and an accident at one of the company’s factories in Israel has added to the pressure.
The PC business remains an important challenge. Intel expects the PC market to contract through 2027, putting additional strain on one of its traditional sources of revenue. Stronger data-center and AI demand has not fully offset that weakness in the company’s near-term outlook.
The company also warned that it probably will not generate positive free cash flow next year. Free cash flow is the money remaining after a company pays its operating expenses and investments in equipment and infrastructure. Intel plans to direct substantial cash toward expanding its manufacturing operations, meaning that investment spending is expected to weigh on cash generation in the short term.
Zinsner described 2027 as an investment year and said positive free cash flow was probably not expected during that period. He added that Intel is targeting a return on invested capital of at least 20% from its manufacturing-node investments, while acknowledging that several large projects will require significant spending at the same time.
Turnaround depends on new factories and partners
Intel’s spending is part of a broader effort to rebuild its manufacturing business and compete with Taiwan Semiconductor Manufacturing Company, or TSMC. Intel aims to produce chips for its own products as well as for outside customers through a foundry business, in which a manufacturer makes semiconductors designed by other companies.
The company’s 18A process is central to that strategy. The manufacturing technology is expected to underpin chips such as Panther Lake and is intended to help Intel recover technological ground.
Intel has also secured partnerships that have supported optimism about its turnaround. In September 2025, Nvidia invested $5 billion in Intel and agreed to work with the company on custom processors for PCs and data centers. The arrangement provided Intel with financial support and connected its processors with Nvidia’s AI ecosystem.
A preliminary agreement with Apple to manufacture some of the company’s chips also helped drive Intel shares above $130 in May. The potential relationship could provide Intel with a significant new customer as Apple seeks to diversify its manufacturing supply chain.
Those developments had strengthened confidence in Intel’s recovery. Friday’s selloff showed that investors remain focused on execution: the company must expand output, manage a shrinking PC market and fund an expensive manufacturing buildout before stronger demand can translate into dependable cash generation.
Moneyiar market picture
Moneyiar market data at 12:44 p.m. on November 1, 2026, showed the following prices and moves:
- Dai (DAI): $1.0009001571, up 0.1% over 24 hours and 0.11% over seven days.
- Telcoin (TEL): $0.0014456507, up 0.02% over 24 hours and 3.14% over seven days.
- Audiera (BEAT): $0.1075509715, up 7.96% over 24 hours and 61.02% over seven days.
- USD.AI (CHIP): $0.0431444349, up 0.15% over 24 hours and down 5.07% over seven days.
