Intel stock closed down 28.58% on Friday, its worst day since the 1970s and wiping ~$12B off US government's stake, after issuing weaker-than-expected guidance

Intel's guidance miss and stock plunge make its upcoming advanced chip customers uncertain for the next two quarters.

Intel's stock experienced its most significant decline since the 1970s on Friday, closing down 28.58% and erasing approximately $12 billion from the U.S. government's stake in the company. This downturn followed Intel's release of weaker-than-expected financial guidance, attributed to a combination of ongoing softness in the personal computer market and a plant shutdown in Israel due to an explosion. The chipmaker projected earnings per share of 25 cents on revenue between $15 billion and $16 billion, falling short of analysts' expectations of 43 cents per share on revenue of $17.1 billion. CEO Lip-Bu Tan, who took over in March 2025, faces challenges in reviving the company and its foundry business, which currently lacks external customers for its advanced chips. The guidance also factors in an estimated $600 million revenue loss over two quarters from the Israeli fab incident. Other tech stocks, including Amazon, Nvidia, and Broadcom, also saw declines following their own earnings reports.

The significant drop in Intel's stock price, its worst performance since the 1970s, signals investor concern over the company's ability to recover amidst a struggling PC market and internal operational challenges like the Israeli fab shutdown. This situation casts doubt on the near-term success of CEO Lip-Bu Tan's turnaround strategy, particularly regarding the foundry business and securing external customers for its advanced chips like the 18A and 14A. The market's reaction suggests a skepticism towards Intel's projections and its competitive positioning against rivals in the rapidly evolving semiconductor industry.

This event highlights the considerable risks associated with capital-intensive semiconductor manufacturing, especially when coupled with macroeconomic headwinds affecting consumer demand for PCs. The failure to secure external foundry customers, even as Intel moves to high-volume production of its most advanced chips, indicates a potential disconnect between its manufacturing capabilities and market adoption. Investors and industry observers will be closely watching Intel's progress in announcing these crucial customer partnerships within the next two quarters, as their absence could prolong the company's financial struggles and impact its long-term viability as a key player in advanced chip manufacturing.