Intel Shares Plunge 28% as AI Demand for Memory Squeezes PC Market
By James Dargan · · 1 min read
Intel’s stock fell around 28% recently, one of its worst on record, after the chipmaker issued a weaker-than-expected fourth-quarter outlook. The sell-off spread across the tech sector, particularly chipmakers, and cut the value of the U.S. government’s 10% stake by $12 billion, according to CNBC. Nvidia, which also took a major stake in Intel in 2025, saw its shares dip as well. Intel’s stock nonetheless remains up more than 70% for the year.
Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below analyst expectations of about $17 billion. It also expects gross margin to fall to 37% from 43% and warned that heavy investment would leave it without positive cash flow.
The core issue is that the AI industry’s appetite for memory and other components is driving up PC prices and weighing on sales. CEO Lip-Bu Tan said customers began signaling a PC slowdown due to memory prices and availability, adding that sharp system price increases this year are straining already tight IT budgets.
On a brighter note, Intel’s data center revenue grew 78% year over year. However, growth there is limited until it adds fab capacity and wins more external customers to compete with TSMC. A new Arizona fab is operational, but the next is not expected until 2028.
