Intel shares collapse, reducing government stake by $12 billion

Intel stock had one of its worst days ever on Friday, crashing about 28% after the chip giant reported a weaker-than-expected outlook for the fourth quarter.

The rout reduced the value of government-held Intel holdings by $12 billion, CNBC reports. The Trump administration asked the government to buy a 10% stake more than a year ago. Nvidia, which also took a large stake in Intel in 2025, also saw its stock fall a bit on Friday. Much of the tech industry – particularly chipmakers – was caught up in the liquidation.

Intel shares remain a profitable investment for the government (and Nvidia) so far, as they are up more than 70% for the year, although they are down significantly from the sky-high prices they reached over the summer.

The scare was caused by Intel warning that it expected revenue of between $15 billion and $16 billion in the fourth quarter, while analysts were expecting around $17 billion. The company also warned that its gross profit margin would decline from 43% to 37%, and that it was investing so much that it did not expect any positive cash flow.

The main problem for Intel is that PC sales are being affected by the AI ​​industry gobbling up memory and other components, causing PC prices to rise.

“Our customers have started reporting PC slowdowns based on pricing and memory availability. Since the start of the year, system endpoint prices have increased significantly, putting additional pressure on already limited IT budgets,” Intel CEO Lip-Bu Tan warned on the call.

On the bright side, revenue from Intel’s data center business increased 78% from last year’s quarter. But the company is hamstrung on that front until it can bring more capacity to its factories and book more external customers for them, competing with the powerful Taiwan Semiconductor Manufacturing Co. One of Intel’s new factories in Arizona is operational, but the next is not expected to come online until 2028.