Intel's 28% Crash Wipes $12 Billion Off US Government Stake

By Olivia Hart

Intel shares fell roughly 28% on Friday, cutting the value of the US government's stake by $12 billion, according to CNBC. It was one of the worst single-day drops in the chipmaker's history. The trigger was not a scandal or a surprise resignation — it was a fourth-quarter forecast that missed Wall Street by a wide margin.

Why did Intel's guidance spook investors?

Intel told investors to expect fourth-quarter revenue of $15 billion to $16 billion. Analysts were looking for roughly $17 billion. That gap — about a billion dollars at the midpoint — would be manageable on its own.

It wasn't on its own. Intel also warned that gross margin would fall to 37% from 43%, a six-percentage-point compression on every dollar of sales. The company further disclosed that its heavy spending would leave it with no positive cash flow.

A company can survive weak quarters. A company burning cash while margins contract invites harder questions about how the buildout gets funded. Friday's chart suggests investors started asking them.

What is the hit to the government and Nvidia?

The Trump administration arranged the government's purchase of a 10% stake in Intel more than a year ago. Friday's selloff erased $12 billion from that holding's value, CNBC reports.

Nvidia, which also took a sizable stake in Intel in 2025, saw its stock slip modestly on Friday. The damage spread well beyond two names: much of the tech sector, chipmakers especially, sold off alongside Intel.

The paper losses, however, come off a high base. Intel stock remains up more than 70% for the year, meaning both the government and Nvidia are still sitting on profits — even after the shares fell sharply from their summer peaks. A 28% drawdown hurts far less when the position has nearly doubled.

What did Intel's CEO actually say?

CEO Lip-Bu Tan identified the culprit on the earnings call: the AI industry is consuming memory and other components, pushing PC prices higher and squeezing buyers out.

"Our customers began signaling a PC slowdown based on the memory prices and availability. Year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets," Tan said.

The quote is notable for what it admits. Intel's core PC business is being damaged by the same AI boom that is enriching its rivals. Component inflation is effectively taxing the company's largest market.

Is there a bright spot in the numbers?

Yes, and it is substantial: data center revenue grew 78% year over year. That is the kind of growth rate investors normally reward, not punish.

The catch is capacity. Intel cannot fully serve that demand until its fabs come online and win external customers — competing directly with Taiwan Semiconductor Manufacturing Co., the industry's powerhouse. One new Arizona fab is operational. The next one is not expected online until 2028.

So the growth is real but constrained for years, not quarters. Friday's crash, in plain terms, repriced a stock that had run up 70% on promises the fabs have not yet delivered.