Intel’s stock dropped sharply by 29% on Friday, marking its biggest daily decline since the 1970s. The plunge followed the chipmaker’s release of weaker-than-anticipated financial guidance, attributed to persistent softness in the PC market and a production disruption caused by an explosion at a plant in Israel. This result poses a significant challenge for CEO Lip-Bu Tan, who took the helm in March 2025 with plans to rejuvenate Intel after missing earlier opportunities in the artificial intelligence chip race. The steep decline wiped approximately $12 billion off the value of the U.S. government’s 10% equity stake in Intel, an investment initiated under the Trump administration over a year ago.

Intel’s third-quarter forecast missed analysts’ expectations, with adjusted earnings per share projected at 25 cents, below the anticipated 43 cents, and revenues forecasted between $15 billion and $16 billion, short of the $17.1 billion consensus. The company is confronting a contraction in the global PC market, which has suffered from rising memory and component costs, contributing to a 4% drop in shipments during the second quarter of 2026. The plant explosion in Israel, which resulted in the tragic loss of two lives and seriously injured a third, will also cut into Intel’s revenue by an estimated $600 million over two quarters, further hindering supply and shipment capacity.

The decline in Intel’s shares also weighed on other tech stocks, with major companies like Amazon, Nvidia, Broadcom, and Qualcomm also posting losses following a week marked by disappointing earnings from technology giants. Amazon’s shares fell 1.4% after missing third-quarter revenue and earnings expectations and reporting negative free cash flow for the second consecutive quarter. Investors are showing concerns about the heavy capital expenditures from tech firms in their AI buildouts and whether these investments will achieve the desired returns amidst a slowing market.

Despite the setbacks, Intel continues to invest in its advanced chip manufacturing capability, emphasizing its foundry business as central to its turnaround strategy. The company is ramping up production of its most advanced chips at its new fab in Arizona, aiming to provide a domestic alternative to Taiwan Semiconductor Manufacturing Co. While Intel currently has no external customers for these chips, the company expects new customers to be announced in upcoming quarters. CEO Tan highlighted progress on next-generation 14A chips, underscoring Intel’s commitment to long-term growth despite the near-term challenges.