Intel stock falls 28%, cutting $12B from government stake amid weak outlook

Intel's stock experienced a significant decline of about 28% following the company's weaker-than-expected revenue outlook for the fourth quarter, TechCrunch reported.

This drop reduced the value of the government's holdings in Intel by $12 billion. The government acquired a 10% stake in Intel over a year ago during the previous administration, according to TechCrunch.

The decline was linked to a forecasted revenue range of $15 billion to $16 billion, below analysts' expectations of around $17 billion. Intel also projected a decrease in its gross profit margin from 43% to 37% and anticipated no positive cash flow due to heavy investments.

Intel's CEO noted that PC sales are slowing as the AI industry's demand for memory and components drives up PC prices, putting pressure on IT budgets. Despite this, Intel's data center revenue grew 78% year-over-year, though capacity constraints at its fabs limit growth.

Intel is currently expanding its manufacturing capacity with new fabs, including one operational facility in Arizona, aiming to compete with other major semiconductor manufacturers like Taiwan Semiconductor Manufacturing Co.