Intel shares plunge 23% after gloomy PC sales forecast

The plunge after the forecast

Intel shares fell 23% in after-hours trading after the close of regular trading sessions on October 29, Kun.uz reports. The cause was the company's forecast of weak personal computer sales: according to Intel's estimates, the global PC market could shrink by 12% in 2026 and by another 10% in 2027, with the market stagnating at least through the first half of next year.

The forecast fell short of analysts' expectations

The company projected revenue of $15–16 billion for the fourth quarter, while analysts on average had expected $17.07 billion. Adjusted earnings per share were forecast at 25 cents versus the expected 43 cents.

A strong quarter, but not across all segments

The third quarter's own results were strong: revenue grew 21% year over year to nearly $16.5 billion, and adjusted earnings per share of 52 cents beat analysts' expectations. However, the picture varies by business line: revenue from data centers and artificial intelligence rose 78% to $7.3 billion, while the PC chip segment declined 5% to $8.1 billion.

Memory shortage and a factory accident

Intel cites a shortage of memory chips and their sharp price increases as one of the main reasons for the weak forecast: components for laptop and desktop PC makers are becoming more expensive, which raises the prices of finished devices and dampens buyer demand — and with it, demand for Intel processors. An additional complication was an accident at the company's plant in Kiryat Gat, Israel, in October, which killed two people: the facility was shut down for two weeks. According to the company's own estimate, the incident could result in a revenue loss of about $600 million in total over two quarters and limits its ability to supply chips for AI servers.