Intel extended its opening drop to 29% on Friday, putting the stock on pace for its steepest one day percentage decline on record as the Nasdaq 100 fell 3%. The selloff wiped about $940 billion in market value from US stocks in early trading, with Amazon sliding almost 6% following its own earnings report.
Bank of America analyst Vivek Arya downgraded Intel to neutral from buy and cut his price objective to $100 from $145. Arya wrote that the company “has not communicated enough traction with external foundry customers” and that its data center momentum is being offset by a “surprisingly sharp drop in PC shipments” of 25% to 30% sequentially in the fourth quarter, alongside substrate supply constraints and products that “are not yet technically competitive against AMD/ARM-based rivals that are growing 2x-4x faster.”
The rout followed Intel’s fourth quarter forecast for revenue of $15 billion to $16 billion and adjusted earnings of $0.25 a share, below consensus estimates of $17.1 billion and $0.43, with adjusted gross margin projected to fall to 38% from 44.1% in the third quarter. Management attributed the outlook to rising memory prices weighing on PC demand through at least the first half of 2027, an October accident at its Kiryat Gat factory in Israel that is projected to reduce fourth quarter revenue by about $300 million, and packaging shortages limiting data center chip output. In the third quarter, data center and AI revenue rose 78% year over year to $7.3 billion, while Intel Foundry lost about $1.9 billion on $6.7 billion in revenue, with $411 million coming from external customers.