Intel warns AI boom chip thirst is hurting business as shares plunge 25%
Forecast weighs on shares
Intel’s shares dropped as much as 25% in premarket trading Friday. The company said shortages linked to rising AI demand were weighing on the market. For the fourth quarter, Intel expects revenue between $15 billion and $16 billion and earnings per share of $0.25. Third-quarter earnings per share were $0.52.
AI demand pressures PC sales
Demand for memory and server chips used to train and run AI models has driven shortages and higher memory prices. That raises the cost of building and buying PCs, leading computer-makers to order fewer Intel chips. Intel’s client-computing group, which sells PC chips, brought in $8.1 billion in the third quarter, a 9% decline from the previous quarter.
Mixed results across businesses
Intel reported third-quarter revenue of $16.5 billion, up 20% from a year earlier. Its data-center business offered a brighter result, with revenue rising nearly 80% year over year to $7.3 billion. Intel’s stock had climbed more than 130% since the start of 2026, but that increase stalled in recent weeks during a broader technology-sector sell-off.
Plant shutdown adds pressure
The company said a two-week shutdown at its Israeli plant followed what Tan called “an unfortunate and tragic accident.” Intel expects the closure to reduce fourth-quarter revenue by about $300 million. Chief Financial Officer Dave Zinsner said Intel does not expect a lasting recovery until memory supplies improve and prices begin to return to normal.
Key points
- Intel shares fell as much as 25% in premarket trading Friday.
- The company forecast fourth-quarter revenue of $15 billion to $16 billion.
- Higher memory prices are leading computer-makers to order fewer Intel chips.
- A two-week shutdown at Intel’s Israeli plant is expected to reduce revenue by about $300 million.