US chip giant Intel's stock plunges 22% as high memory prices suppress PC demand, missing Q4 guidance

U.S. semiconductor manufacturer Intel released its financial forecast for the current fourth quarter, indicating revenue between $15 billion and $16 billion, falling short of analysts' expectations of $17 billion. The company also projected adjusted earnings per share (EPS) of 25 cents, significantly below the market consensus of 43 cents. This guidance miss caused Intel's stock to plummet approximately 22% in after-hours U.S. trading.

Intel CFO David Zinsner stated that the company has observed a slowdown in business for weeks due to declining computer sales driven by soaring memory prices. He warned that this situation would not improve at least until the first half of 2027. CEO Lip-Bu Tan noted that the entire market is affected, with memory prices remaining a severe problem throughout next year. Intel expects the PC market to shrink by another 10% in 2027, following a 12% decline this year.

Although the AI boom has increased demand for data center memory, thereby driving up memory prices, this has simultaneously suppressed consumer PC sales. Additionally, Intel faces supply chain issues for data center chips, including shortages of certain raw materials and the temporary closure of a factory in Israel. While Intel's processors also benefit from AI demand, the company has been unable to fully meet market needs.

In the previous quarter, Intel's revenue rose 21% year-over-year to $16.5 billion, meeting analyst expectations, but net profit fell 18% year-over-year to $3.3 billion. Previously, investors were optimistic about Intel profiting from the data center business through new manufacturing processes and its emerging role as a foundry for other chipmakers. This year, Intel invested approximately $20 billion in factories and equipment, with Zinsner suggesting spending would increase further next year.