Intel plunged 30% intraday, with market value evaporating nearly $150 billion
On October 30 local time, Intel's stock price intraday decline once widened to 30%, with market value evaporating nearly $150 billion, the largest single-day drop in its 52 years since going public. The plunge began with the earnings report released after market close the previous day: its fourth-quarter revenue guidance of $15 billion to $16 billion was below analysts' expectation of $17.07 billion, and adjusted earnings per share guidance of $0.25 was also below the expected $0.43. CFO David Zinsner said the company is not expected to achieve positive cash flow this year. Fourth-quarter revenue for the PC chip business is expected to decline more than 20% quarter over quarter, and the company expects the PC market weakness to last at least until the first half of 2027; the explosion at its Israeli factory is expected to cause about $600 million in revenue losses within two quarters. That day, chip stocks such as AMD, Arm, Qualcomm and Nvidia also fell 2% to 10%.
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The original article uses earnings guidance and business data to explain the causes of Intel's single-day plunge, and also presents the chain reaction across the semiconductor sector.
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On October 30 local time, Intel's stock price suffered a severe setback. During intraday trading, the decline once widened to 30%, and nearly $150 billion in market value evaporated, equivalent to about 997.5 billion yuan. Judging from historical stock prices, Intel's stock is facing its largest single-day drop in the 52 years since its listing.
The plunge began after the U.S. stock market closed on October 29. After Intel announced its third-quarter financial results, its stock price fell as much as 23% in after-hours trading. Although third-quarter results were better than market expectations, the company's fourth-quarter business outlook was significantly below Wall Street expectations, causing investors to renew concerns about its operating prospects.
Specifically, Intel expects fourth-quarter revenue of $15 billion to $16 billion, below the analysts' average estimate of $17.07 billion; adjusted earnings per share are expected to be $0.25, also below the market expectation of $0.43. At the same time, Intel Chief Financial Officer David Zinsner said the company does not expect to achieve positive cash flow this year.
The pressure weighing on Intel mainly comes from two aspects.
On the one hand, the PC market recovery is weak. Intel expects fourth-quarter revenue in its PC chip business to decline by more than 20% quarter on quarter, after revenue in that business had already fallen 5% year on year in the previous quarter. Rising memory chip prices have pushed up the cost of complete PCs, further suppressing consumer demand. The company expects weakness in the PC market to last at least until the first half of 2027.
On the other hand, Intel's investment in AI and advanced manufacturing remains huge, but capacity bottlenecks limit its ability to meet market demand. The company's capital expenditure this year is expected to reach $20 billion and will increase substantially in 2027. At the same time, an explosion at its factory in Israel has also affected chip supply and is expected to cause about $600 million in revenue losses within two quarters.
Intel's stock plunge also triggered a chain reaction in the semiconductor sector. When the U.S. stock market opened that day, shares of chip companies including AMD, Arm, Qualcomm, Nvidia, Broadcom and Micron all fell to varying degrees, with declines ranging from 2% to 10%.