Intel share plunge reduces value of US government holding by $12bn

Intel shares fell about 28% on Friday after the chipmaker issued a fourth-quarter outlook below market expectations, reducing the value of the US government’s 10% holding by $12 billion, CNBC reported. The Trump administration acquired the stake more than a year earlier, while Nvidia also took a significant position in Intel in 2025.

Intel forecast fourth-quarter revenue of $15 billion to $16 billion. Analysts had been looking for roughly $17 billion. The company also said gross margin was expected to decline to 37%, from 43%, and that its level of investment meant it did not expect positive cash flow.

A weaker PC backdrop meets a costly investment cycle

Chief executive Lip-Bu Tan said customers had begun signalling a slowdown in PCs because of memory pricing and availability. He said system endpoint prices had risen significantly year to date, increasing pressure on already constrained IT budgets.

The warning placed Intel in a broader technology sell-off, particularly among chipmakers. Nvidia shares also declined on Friday. Even after the sharp move, Intel stock remained up more than 70% for the year, leaving both the government investment and Nvidia’s holding profitable so far.

The market reaction also followed a period in which expectations for Intel had risen sharply. The execution questions highlighted by Intel’s execution challenge after its share-price surge remain relevant as the company seeks to translate investment and renewed market attention into a more durable operating position.

Data-center growth does not remove foundry constraints

Intel reported that data-center revenue increased 78% from the year-ago quarter. That growth provides a positive counterweight to the pressure in PCs, but the company remains constrained by the capacity it can bring online and by its ability to win more external customers for its fabs.

Those ambitions place Intel in direct competition with Taiwan Semiconductor Manufacturing Co., a dominant external foundry provider. One of Intel’s new Arizona fabs is already operational, but the next facility is not expected to come online until 2028.

What businesses should watch

For IT buyers and technology leaders, Intel’s outlook underscores how AI-driven demand for memory and other components can affect PC availability, endpoint costs and procurement budgets. Businesses should evaluate near-term device plans alongside component pricing, while treating Intel’s data-center expansion and additional manufacturing capacity as longer-term variables in supplier planning.