Intel Stock Plunges 28% After Weak Guidance and Cash Burn Warning

Intel shares fell about 28% on October 30, 2026, after the company guided fourth-quarter revenue to $15 billion to $16 billion, below analyst expectations of around $17 billion. According to TechCrunch, the drop removed $12 billion from the value of the U.S. government's Intel holdings. Bloomberg characterized it as the worst stock rout in more than four decades, citing a PC industry slump and supply-chain snags.

The sell-off followed Intel's third-quarter 2026 results, released October 29. The company reported revenue of $16.5 billion, up 21% year over year, and GAAP earnings per share attributable to Intel of $0.60. GAAP is the standard accounting framework, without adjustments. On an adjusted basis, which strips out certain one-time and non-cash items, EPS came in at 52 cents, against analyst expectations of 40 cents, according to CNBC. Reuters reported that the shares dropped 23% in after-hours trading that evening.

The forward numbers drove the reaction. Intel warned that its gross profit margin, the share of revenue left after the direct cost of making its products, would fall to 37% from 43%. It said it expected no positive cash flow because of heavy investment spending, and Reuters reported that Intel expects to burn cash in 2026 as the PC market weakens. CEO Lip-Bu Tan said customers had begun signaling a PC slowdown tied to memory prices and availability.

The quarter was not uniformly weak. Intel's data center business, which sells server chips to the large computer facilities that run cloud services, grew 78% year over year, according to TechCrunch. In manufacturing, one of the company's new fabs (chip factories) in Arizona is operational, and the next one is not expected to come online until 2028.

The stake at the center of the headlines has its own history. The U.S. government bought its position more than a year before the October sell-off, under the Trump administration. Yahoo Finance reported that the government holds 9.9% of Intel and bought at $20.47 per share in August 2025, and that the Oct. 30 decline was on pace for Intel's worst single-day performance since 1974. Nvidia also took a large Intel stake in 2025. Despite the sell-off, Intel's shares were still up more than 70% for the year as of October 30.

The broader context here is a tension that readers following the sector will recognize. Intel's client PC business is softening just as its data center business accelerates, and the company is spending heavily on new capacity while generating no positive free cash flow. Those two trends pull in different directions, and the margin guidance is now compressing.

In my view, the critical variable for the next several quarters is whether data center growth can absorb the PC decline fast enough to restore margin and cash generation. The October guidance does not answer that question on its own.

The shareholder side of the story is also worth noting. A government stake bought at a fixed per-share price now sits well below that level in market terms, and Nvidia's position has been exposed to the same repricing. For a semiconductor company in the middle of a long, capital-intensive build-out, the share price does more than keep score. It affects the cost of raising capital and the room the company has to keep investing through a downturn.

What the quarter sets in motion still depends largely on execution. The Arizona fab that is running now gives Intel a tangible proof point for its manufacturing plans, and the data center figures show demand beyond the PC. The open question is timing. The margin decline and cash burn Intel has forecast will arrive before the next fab comes online, and the trajectory of the PC market will determine how much room the company has in the meantime.