Intel shares plunge 29% after earnings, worst day since 1974

what happened

Intel shares slumped 29% on Friday to about $65 a share, the worst one-day performance in the company's history since 1974. The stock had been up roughly 150% this year before its third-quarter report raised doubts about the pace of its turnaround and operating results, TradingView reported.

Intel beat third-quarter earnings estimates, but revenue came in slightly below consensus and fourth-quarter guidance was also under forecasts. Investors were disappointed by weak PC sales amid high memory chip prices, along with supply and production problems on the server side. Data center and AI revenue rose nearly 80% year over year to $7.3 billion.

Bank of America, Roth Capital Partners and Seaport Research Partners all cut their ratings to neutral from buy, while New Street upgraded the stock to buy. Analysts remain split: KeyBanc's John Vinh called the selloff "quite overdone," while Seaport's Jay Goldberg advised staying on the sidelines until capacity issues are resolved. CNBC estimated that the U.S. government's 433 million share stake lost about $11 billion in value.

why it matters

Two issues matter most for the market: weakness in the PC segment and capacity limits that are holding back growth in server chips amid AI demand. Some analysts argue that the stock may take a while to recover until these production problems are fixed.

market impact

Intel shares and chipmakers: weak outlook and capacity shortages weigh on the stock

• ▼Intel shares pressure down — weak revenue guidance and server CPU production problems

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