Intel shares tumble over 30% as AI-related PC slowdown worries investors

Intel experienced its steepest single-day decline on Friday, with shares dropping over 30% after the chipmaker warned that a slowdown in personal-computer sales was weighing on its fourth-quarter outlook. The company said the slowdown was linked to the surge in demand for AI data-center processors, which has driven up computer prices and created component shortages.

Analyst Dan Ives of Yorkville Ives said Intel’s PC chip segment “was a disaster this quarter driven by higher memory prices/supply issues caused by the AI buildout.” He added that the week had been “absolutely brutal for tech investors.”

The slide made Intel the biggest loser on the Nasdaq-100, while the broader Nasdaq index fell 2.7% after a 1.3% drop the previous day. Amazon also slipped, losing up to 5.9% after reporting third-quarter capital spending of $77.3 billion.

Combined, Intel and Amazon shed roughly $300 billion in market value on the day. Alphabet saw a record $500 billion erosion in its market cap after AI-related concerns hit its advertising revenue.

Goldman Sachs warned that the five AI “hyperscalers” – Microsoft, Alphabet, Amazon, Meta and Oracle – are expected to spend $1.2 trillion on infrastructure next year, and analysts said the scale of spending raises questions about future profitability. Rich Privorotsky of Goldman Sachs said tech firms must demonstrate that heavy investment will generate “meaningful” revenues, while Barclays’ European equity head Emmanuel Cau noted that “the combination of deteriorating cash flows and rising capital commitments means the debate over whether AI returns can ultimately justify the scale of investment may not be resolved any time soon.”

The market downturn was compounded by a $6.3 billion hack of crypto exchange Binance and rising oil prices amid ongoing Middle-East tensions, with Brent crude climbing above $117 a barrel.

The S&P 500 fell 1.2% on Friday. The sell-off comes ahead of the U.S. midterm elections, where Democrats are projected to take control of both chambers of Congress. President Donald Trump posted on Truth Social that the nation is entering a “golden age,” asserting that inflation is lower and incomes are higher under his administration.