What just happened? Intel was one of the stock market's biggest surprises this year. Its shares nearly quadrupled between January and a record high in late June – a run fueled by demand for the CPUs behind agentic AI. But on Friday, the chipmaker gave back a huge chunk of those gains in a single session. The stock closed down almost 29% at $65.76, its worst day since 1974.
Oddly enough, the quarter itself went well. Intel beat Wall Street's earnings estimates. Its data center revenue jumped nearly 80% from a year earlier to $7.3 billion, too. But its forecast for the last three months of the year landed well short: analysts had penciled in about $17 billion in revenue. Intel only expects $15 billion to $16 billion.
The weak spot is PCs. AI data centers are buying up so much of the world's memory that laptops and desktops have gotten a lot pricier this year. So fewer of them are selling. Intel now expects PC shipments to drop about 12% in 2026 and another 10% in 2027. It doesn't see things improving until memory supply and prices get back to normal.
The forecast also has to absorb a shutdown at the company's fab in Kiryat Gat, Israel. That's where an explosion killed two workers earlier this month.
Going by Yahoo Finance's count of closing prices back to 1973, only a nearly 30% slide in July 1974 was worse than Friday. Bank of America, D.A. Davidson, Seaport and Roth all downgraded the stock to neutral the same day. The US government felt it too, since its roughly 10% stake lost about $12 billion in paper value. Even so, Washington's shares are still worth over three times the $20.47 apiece it paid last year.
Intel's slide came a day after Alphabet's worst session ever. The Google parent shed roughly $500 billion in market value on Thursday after its quarterly report showed AI infrastructure spending had pushed free cash flow $9.07 billion into the red.
Meta's earnings didn't land much better. Both it and Alphabet now sit more than 20% below their 52-week highs, according to Yahoo Finance data. Even Nvidia is about 12% off its peak, mostly because investors fear its biggest customers will have to scale back spending in 2027.
Over in Seoul, SK Hynix fell 7% and Samsung lost 3% on Friday. That pulled South Korea's KOSPI down nearly 3.5%. Both companies make the memory that AI data centers have been soaking up, so the same boom squeezing Intel's PC business is now rattling investors in the boom's biggest winners.
For anyone shopping for a PC, none of this points to cheaper hardware soon. Memory prices could keep climbing through next year. Some forecasts don't have real relief arriving until 2028.