Intel shares fall 16% after weak Q4 outlook and Israel plant explosion

Intel's shares dropped about 16% in after-hours trading on Thursday after the chipmaker issued a weaker-than-expected fourth-quarter outlook and disclosed a $600 million revenue impact from a deadly explosion at its Kiryat Gat plant in Israel. The blast killed two workers and injured a third. CFO David Zinsner said the incident would cost the company roughly $600 million in lost revenue over two quarters and that production at the facility would resume ramping up by the end of the week.

For the fourth quarter of 2026, Intel projected adjusted earnings of $0.25 per share on revenue of $15 billion to $16 billion, missing analysts' expectations of $17.1 billion in revenue and $0.43 per share. The company attributed the shortfall to a prolonged slowdown in the personal-computer market, which it expects to persist through at least the first half of next year. It said it will keep disciplined investment in capacity and working capital to support future growth.

Despite the disappointing forecast, Intel reported stronger-than-expected third-quarter results, with adjusted earnings of $0.52 per share and revenue of $16.51 billion, a 21% year-over-year increase. Revenue from the client computing and physical AI segment fell 5% to $8.1 billion, while data-center and AI revenue rose 78% to $7.3 billion.

CEO Lip-Bu Tan said the company continues to see strong demand for its CPUs and broader computing platforms over the long term, even as the PC market faces near-term headwinds. Zinsner added that Intel will not spend capital unless it has clear evidence of product health and customer demand.

The stock decline occurred amid a broader market pullback, with the Nasdaq down 1.38%, the S&P 500 off 0.3%, and the Dow Jones Industrial Average slipping 0.25%. Technology peers also faced pressure: Alphabet shares fell 12% after missing earnings expectations, and Amazon's stock dropped about 7% following a modest earnings miss and a lower-than-expected revenue outlook for the holiday quarter. Meanwhile, Amazon Web Services reported a 39% revenue jump to $45.98 billion, its fastest growth since late 2021.