At the end of June, Intel Corp. (NASDAQ:INTC) had just wrapped up the best six-month run in its history. The stock soared 278% in the first half of 2026, its strongest six-month gain since 1972.
That rally is now unwinding in real time.
Intel shares sank 25.6% to $68.52 in premarket trading Friday, according to Benzinga Pro data. That would nearly match the 26.1% plunge of Aug. 2, 2024.
Only one session in more than five decades of trading was worse: July 5, 1974, when the stock lost 29.9%.
At Friday’s premarket price, about $125 billion of market value would vanish in a single day.
Cantor Fitzgerald analyst C.J. Muse needed only five words to describe the outlook: “Houston, we have a problem.”
Muse kept a Neutral rating on the stock but cut his price target to $90 from $125, arguing that shortages of memory, wafers and substrates are forcing a meaningful reset to Intel’s numbers.
Intel Beat the Quarter: The Outlook Is the Problem
The third quarter itself held up. Revenue came in at $16.5 billion, up 21% from a year earlier and in line with consensus.
Adjusted earnings reached 52 cents per share, well above the 40 cents analysts expected, while gross margin climbed to 44.1% against a 41.8% forecast.
The guidance, however, undid all of that.
Intel expects fourth-quarter revenue of $15 billion to $16 billion. The $15.5 billion midpoint sits about 9% below the $17.11 billion consensus. Adjusted earnings are guided to 25 cents per share versus 44 cents expected, and gross margin to 38% versus 42.4%.
Memory Prices Are Breaking the PC Market
PCs took the first hit. Soaring memory chip prices are pushing computer makers to slash inventory, and Intel guided client computing revenue down more than 20% from the previous quarter.
According to Muse, the guidance implies PC unit shipments roughly 45% lower than a year earlier, a figure he called a meaningful surprise. Customers only began cutting build plans in late August, Cantor noted.
The pain spread to PC makers. HP Inc. (NYSE:HPQ) fell 8.5% in premarket trading, and Dell Technologies Inc. (NYSE:DELL) lost 10.1%.
In data centers, the problem is the opposite. Demand for server processors driven by agentic AI, systems that carry out tasks on their own, far exceeds what Intel can make.
A lack of Intel 3 wafers and substrates caps data center growth at the mid-teens percent sequentially in the fourth quarter and roughly flat in the first quarter of 2027. An incident at Intel’s Fab 28 plant in Israel adds about $300 million of lost revenue in the fourth quarter and roughly two percentage points of margin pressure.
Cantor Cuts Its 2027 Earnings Forecast by Nearly a Quarter
As a result, Muse now models 2027 earnings of $1.65 per share, down from $2.15 and well below the $2.13 consensus. His $90 target equals 30 times his 2028 estimate of $3.
He also flagged a clear loss of server share to Advanced Micro Devices Inc. (NASDAQ:AMD), whose shares fell 8.6% premarket, and negative free cash flow guidance for all of 2027. Cantor expects capital spending of $28 billion to $30 billion next year, up from about $20 billion in 2026.
Still, Muse is not turning bearish. Management expects both revenue and gross margin to grow in 2027, and sees the server processor market rising from about $40 billion today to roughly $200 billion over five years.
Wall Street Rushes to the Sidelines
Other analysts moved faster. Bank of America’s Vivek Arya downgraded Intel to Neutral from Buy and cut his target to $100 from $145, while Roth Capital’s Suji Desilva made the same downgrade and slashed his target to $70 from $120.
Among 33 analysts tracked by Benzinga Analyst Ratings, 10 rate the stock a Buy, 22 a Hold and one a Sell, with an average price target of $100.
Chip stocks broadly followed Intel lower. The VanEck Semiconductor ETF (NASDAQ:SMH) dropped 4.9% before the open.
Even after Friday’s drop, Intel would remain up about 86% this year, having gained nearly 150% through Thursday. The stock, however, would trade about 52% below its 52-week high of $142.35.
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