Intel crashes 25 percent on PC demand collapse, shares track worst day since 1982 even as data-center revenue surges 78 percent, AI boom bids up memory prices and starves the PC market

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Intel fell 25 percent in premarket trading in New York after fourth-quarter guidance came in far below expectations, a decline that would be the worst in Bloomberg data going back to 1982 if it holds through the session. Amazon dropped about 7 percent after its own report showed surging cash burn and the slowest e-commerce growth in three years. Nasdaq futures fell more than 2 percent.

The paradox is that Intel's third quarter was strong. Adjusted earnings of 52 cents a share beat the 41-cent consensus, revenue rose 21 percent to $16.51 billion, and the Data Center & AI segment grew 78 percent to $7.32 billion, well above estimates. What collapsed was the outlook: fourth-quarter revenue guided to $15-16 billion against a consensus of $17.05 billion, earnings of 25 cents against 43 cents expected, gross margin of 38 percent against 42.8 percent. Client Computing — the PC business — shrank 5.1 percent to $8.10 billion, against an $8.82 billion consensus.

The PC correction has an AI-shaped cause. Vital Knowledge analysts noted that data-center demand drives up the price of memory, pushing average selling prices higher and crushing consumer demand — the boom is taxing the business next door. Morgan Stanley called it a "surprisingly severe PC correction," compounded by the aftermath of an accident at Intel's Fab 28 in Israel, which Citi estimates will cost roughly $300 million in revenue and 200 basis points of gross margin across the fourth and first quarters. Chief financial officer David Zinsner expects the PC slowdown to run at least through the first half of next year.

The wider market is repricing the same story. The Nasdaq 100 is tracking its biggest monthly underperformance against the equal-weight S&P since 2002, with members losing more than $1.2 trillion in market capitalization this month; an AI reckoning that began with Alphabet's record plunge has now claimed Amazon and Intel. The rotation is visible elsewhere: Dow futures rose 0.1 percent, defensives such as Mondelez, Gilead and Colgate were bid higher, the equal-weight index hit its highest level since August, and the 10-year Treasury yield fell to 4.91 percent on haven demand.

Citi kept its Buy rating on Intel and cut its price target to $100, trimming calendar 2026, 2027 and 2028 earnings estimates by 27 cents, 96 cents and $1.69 respectively. The cuts widen with each year out.

Intel's data-center business grew 78 percent in the third quarter. The stock lost a quarter of its value the next morning.