Intel warns of weak quarter after Israel fab blast; shares fall as much as 29%

Centre · 2On 29 October Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below analysts' average estimate of $17.07 billion (LSEG data), and adjusted profit of 25 cents per share against estimates of 43 cents. 1 2 Centre · 1The company blamed a factory explosion in Israel and a prolonged slowdown in the PC market, which offset strong demand for its AI server chips. 1 Centre · 1Finance chief David Zinsner told Reuters the October explosion at the Kiryat Gat fab cut the fourth-quarter revenue outlook by roughly $300 million and gross margins by about 200 basis points, with a similar revenue hit expected in the first quarter, roughly $600 million over two quarters. 3

Centre · 1The fab did not operate for about two weeks. Local media reports cited by CNA said the blast killed two people and seriously injured one. Intel is still assessing which wafers are salvageable and planned to start ramping up production by the end of that week; Zinsner said any impact beyond the estimate remained to be seen. 3 1 Centre · 1The Kiryat Gat fab largely produces data centre chips using Intel's 10 manufacturing process. 1 Centre · 1Zinsner said Intel expects the PC slowdown to continue at least through the first half of next year, and the company expects PC chip revenue to fall more than 20% sequentially this quarter after a 5% drop in the third quarter, to $8.10 billion against estimates of $8.98 billion. 1 4

Right · 1Breitbart, citing Zinsner, reported Intel expects global PC shipments to fall about 12% this year and a further 10% in 2027, and quoted Zinsner on the earnings call saying "We do think that the PC is going to go through a renaissance" as AI applications move onto devices. 5 Centre · 2Coverage links the PC weakness to higher memory prices as suppliers shift capacity to AI-focused memory. CEO Lip-Bu Tan said customers began signalling a slowdown based on memory prices and availability. 4 2 Centre · 2Intel also said it does not expect positive cash flow this year, and TechCrunch reported it warned gross margin would fall to 37% from 43%. It raised its 2026 capital spending forecast to $20 billion from $18 billion and said 2027 spending would rise significantly. 4 2 1

Mixed · 2Breitbart gave the projected gross margin as 38%, against 37% in TechCrunch, both compared with 43% in the third quarter; Breitbart also quoted Tan saying "I'm disappointed that we were not able to meet strong customer demand in this quarter" and noted Intel has struggled to make enough server chips because of manufacturing bottlenecks and component shortages. 5 2 Centre · 2Third-quarter results, for the quarter ended 26 September, were broadly in line: revenue rose 21% to $16.51 billion and adjusted profit of 52 cents per share beat the 40-cent estimate. TechCrunch said data centre revenue grew 78% year on year. 1 2 Centre · 2Shares fell more than 20% in extended trading on 29 October, and CNA reported a drop of some 18% in a separate report that day. On 30 October they fell 25% in premarket trading and 29% later, putting Intel on track for its sharpest one-day decline and a loss of more than $137 billion in market value, per CNA. TechCrunch put the fall at around 28%. 1 4 2

Centre · 1The selloff spread across chip and server stocks: AMD, Arm, Qualcomm, Nvidia, Broadcom and Micron fell 2% to 10%, Dell, HPE and Super Micro fell 6% to 10%, the STOXX Europe 600 Technology Index fell 2% and ASML lost 4.6%. Hargreaves Lansdown analyst Matt Britzman described a "sell first, ask questions later mood". 4 Centre · 1CNA's Thursday report said the semiconductor index fell in post-close trading after Alphabet's 13% drop on Wednesday's results had already pushed it down 1.4%; the index was up more than 60% in 2026 but about 21% below its June high. Analysts there were split on spillover: Rosenblatt's Michael James cited "negative sentiment spillover", while Bokeh Capital's Kim Caughey Forrest said the market might ignore a PC-specific problem. 6 Centre · 1TechCrunch, citing CNBC, said the fall cut the value of the US government's roughly 10% stake in Intel, bought under the Trump administration, by $12 billion. It noted the stock is still up more than 70% for the year, so the stake remains profitable for the government and for Nvidia, which also took a stake in 2025. 2

Centre · 3Breitbart said Intel shares had "more than doubled this year" before the drop, while TechCrunch put the gain at more than 70% for the year after Friday's fall; Breitbart described a possible loss of more than $120 billion in market value, CNA more than $123 billion in premarket trading. 5 2 7 Right · 1Breitbart called the Israel incident a "deadly accident", and cited analyst Jack Gold's view that cloud-based AI could lengthen PC replacement cycles, a risk to Intel's PC business even as AI lifts server demand. 5 Centre · 2The results put a spotlight on Intel's funding and turnaround under CEO Lip-Bu Tan, including a costly foundry push to rival TSMC, after a $23 billion share offering in August. Data centre growth is constrained by fab capacity: TechCrunch said one new Arizona fab is operational and the next is not expected until 2028. 1 2