Intel Stock Plunges 28%, Wiping Out $12B from US Government Stake Amid AI-Driven PC Slump

Intel’s stock suffered one of its worst days in history on Friday, crashing approximately 28% after the chip giant reported a weaker-than-expected outlook for the fourth quarter. This significant rout reduced the value of the US government’s holdings by $12 billion, according to CNBC reports. The Trump administration had acquired a 10% stake in the company over a year ago, making this decline a notable financial setback for public funds. Nvidia, which also took a substantial stake in Intel in 2025, saw its stock drop slightly on Friday as much of the tech industry, particularly chipmakers, was caught in the broad sell-off. The primary driver of the market scare was Intel’s warning that it expects revenue of $15 billion to $16 billion in the fourth quarter, falling short of analyst expectations of around $17 billion. The company also cautioned that its gross profit margin would decline to 37% from 43%, and due to heavy investments, it expects no positive cash flow. Intel CEO Lip-Bu Tan explained on the earnings call that customers began signaling a PC slowdown based on memory prices and availability, noting that year-to-date system endpoint prices have increased significantly, placing additional pressure on already limited IT budgets. Despite the immediate stock crash, Intel’s stock remains a profitable investment for the government and Nvidia, as it is up more than 70% for the year, even though it has dropped from the sky-high prices it commanded over the summer. The core issue facing Intel is that PC sales are being hurt by the AI industry’s voracious appetite for memory and other components, which is driving up PC prices. This dynamic creates a challenging environment for consumer and enterprise hardware sales. On a brighter note, revenue from Intel’s data center business grew 78% over the year-ago quarter. However, the company is hamstrung on that front until it can bring more capacity to its fabs and book more external customers, competing directly with powerhouse Taiwan Semiconductor Manufacturing Co. (TSMC). While one of Intel’s new fabs in Arizona is operational, the next one is not expected to be online until 2028, leaving a gap in production capacity that limits its ability to fully capitalize on the AI boom.