Intel Stock Plummets After Weak Forecast, Factory Blast Costs $600 Million

By סוכנויות הידיעות

Translated & summarized from Ynet by baba

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Intel's stock fell 16% after the company issued a weak fourth-quarter forecast, citing a PC market slowdown and the impact of an explosion at its Israeli plant. The blast is expected to cost $600 million in lost revenue. Despite a strong third quarter, Intel faces challenges in its client computing division, though its data center and AI segments saw significant growth. Other tech giants like Alphabet and Amazon also reported disappointing results, contributing to a broader market downturn.

The story in 5 lines · by baba

Intel's stock dropped 16% after a weak Q4 forecast and the fallout from an Israeli factory explosion.
The factory explosion is projected to cost Intel $600 million in lost revenue over two quarters.
Intel forecasts continued PC market slowdown through the first half of next year.
Third-quarter results showed a 21% revenue increase, driven by data center and AI growth.
Alphabet and Amazon also reported disappointing earnings, impacting the broader market.

Intel Stock Plummets After Weak Forecast, Factory Blast Costs $600 Million — Editorial illustration generated by baba News, not a photograph of the event.

Intel's stock experienced a significant drop of approximately 16% in late trading following the release of a weaker-than-expected fourth-quarter forecast. The chip giant attributed the downturn to a continued slowdown in the personal computer market, exacerbated by the impact of an explosion at its Israeli manufacturing facility.

The explosion, which tragically killed two employees and severely injured a third, is estimated to cost Intel around $600 million in lost revenue over two quarters, according to CFO David Zinsner. The company plans to ramp up production at the affected plant by the end of the week.

For the current fourth quarter of 2026, Intel projected adjusted earnings of 25 cents per share on revenues of $15 to $16 billion, falling short of analyst expectations of $17.1 billion in revenue and 43 cents per share. Zinsner indicated that the PC market slowdown is expected to persist through the first half of next year, though Intel will continue controlled investments in capacity and working capital.

Despite the bleak outlook, Intel reported stronger-than-expected results for the third quarter, with adjusted earnings of 52 cents per share on revenues of $16.51 billion, a 21% increase year-over-year. However, revenue from the client computing and AI hardware division decreased by 5%, while data center and AI revenue surged by 78%. The company's stock, which had risen about 150% year-to-date, saw a 23% decline in October due to concerns over AI infrastructure investments.

Intel CEO Lip-Bu Tan expressed optimism about the long-term demand for CPUs and computing platforms, particularly with the rise of agent-based AI applications. However, the company's third-party manufacturing business faces challenges in establishing market share against competitors like TSMC. Analyst Dan Hutchison noted that customers are seeking alternative suppliers to TSMC for advanced chips.

The broader market also saw declines, with the Nasdaq and S&P 500 indices falling. Alphabet (Google's parent company) shares dropped 12% after its third-quarter earnings and revenue missed expectations, while Amazon's stock fell 7% after reporting slightly lower-than-expected revenue and profit, despite strong growth in its AWS cloud division. Microsoft, however, exceeded expectations, though its stock closed with a slight decrease.