Intel shares tumble 25% as AI-driven memory shortages weigh on outlook

Intel's stock fell roughly 25% in pre-market trading on Friday after the company projected a softer fourth-quarter market amid ongoing memory shortages tied to the AI surge. The California-based chipmaker opened at $68.48, down from Thursday's close of $92.07.

For the third quarter, Intel reported revenue of $16.5 billion, a 20% year-over-year increase, but forecast fourth-quarter revenue of $15 billion to $16 billion and earnings per share of $0.25, compared with $0.52 in the prior quarter.

The AI boom has heightened demand for memory and server chips, driving up memory prices and making personal computers more costly to produce. As a result, PC manufacturers have reduced orders for Intel's chips. "The industry continues to navigate one of the most significant supply shortages in history, driven by the unprecedented demand for super intelligence," CEO Lip-Bu Tan said on the earnings call.

Intel's client-computing segment, which supplies PC chips, generated $8.1 billion in the third quarter, a 9% decline from the previous quarter, and the company expects the division's revenue to fall by more than 20% in the fourth quarter.

Despite the challenges, Intel's data-center business posted an 80% year-over-year revenue increase to $7.3 billion, though the firm acknowledged it could not satisfy all demand for its server chips. CFO Dave Zinsner added that a two-week shutdown at the company's Israeli plant after an "unfortunate and tragic accident" would cut fourth-quarter revenue by about $300 million.

Analysts noted that Intel's stock, which had risen over 130% since the start of 2026, has stalled amid a broader tech sector sell-off. The decline comes as other technology firms also reported weaker results during a busy earnings week.