Intel Corp. shares tumbled roughly 20% in extended trading Thursday after the semiconductor giant issued a fourth-quarter revenue outlook that fell sharply below Wall Street estimates, weighed down by an operational disaster in Israel and a prolonged slump in personal computer demand.
The company forecast fourth-quarter revenue between $15 billion and $16 billion, significantly trailing analysts’ average projection of $17.07 billion, according to data compiled by LSEG. Adjusted earnings are expected to land at 25 cents per share, falling well short of the 43 cents anticipated by analysts. The gloomy outlook overshadowed an otherwise solid third quarter, in which revenue rose 21% year-over-year to $16.5 billion.
Compounding the company’s challenges, Intel disclosed that an October explosion at its Kiryat Gat fabrication facility in Israel will erase roughly $600 million in revenue across two quarters.
The blast, which killed two workers, injured another, and idled the plant for approximately two weeks, is expected to reduce fourth-quarter revenue by about $300 million and compress gross margins by roughly 200 basis points. A similar financial drag is projected for the first quarter of next year.
Intel Chief Financial Officer David Zinsner told Reuters that engineers are assessing wafers to determine which units remain salvageable. The Kiryat Gat site primarily manufactures server and data center chips utilizing Intel’s 10-nanometer process. While production is slated to begin ramping back up by the end of this week, Zinsner acknowledged that the operational fallout could widen depending on final inspection results.
The factory outage hits as Intel struggles to navigate persistent production bottlenecks and satisfy soaring demand for its artificial intelligence (AI) hardware. CEO Lip-Bu Tan emphasized that the company’s immediate priority remains unlocking supply to satisfy robust orders for its flagship Xeon server processors.
Simultaneously, a persistent downturn in the consumer market continues to erode the company’s core business. PC chip sales fell 5% in the third quarter to $8.1 billion, missing expectations of $8.98 billion. Zinsner warned that fourth-quarter PC revenue could drop in the mid-twenty percentage range as rising memory costs inflate retail PC prices.
“Looking ahead, we see the PC slowdown continuing at least through the first half of next year,” Zinsner said, noting that Intel will maintain disciplined capital spending to expand manufacturing capacity over the long term.
The report marks a sudden reversal for a stock that had more than doubled this year. Intel warned it expects to burn cash in 2026 amid aggressive capital expenditures tied to its multi-billion-dollar foundry turnaround, designed to challenge contract manufacturing leaders such as TSMC. That ambitious push was bolstered in August by a $23 billion upsized equity offering.
Trading below $76 per share after hours, the stock touched its lowest point since April as investors recalibrate expectations against steepening manufacturing costs and lingering market headwinds.
