Intel's 29% Fall Hits Taxpayers' Stake
Intel's worst day since 1974 cut more than $11 billion from the value of the government's 9.9% holding, which was paid for with federal chip grants.
An Intel Core i9-14900KF desktop processor, August 2024.Illustration by The Good Times, based on a photo by Pstrahl / Wikimedia Commons (CC BY-SA 4.0)
Intel shares fell 28.6% in one session to $65.76, the stock's worst day since 1974, according to the Associated Press. The U.S. government owns 433.3 million Intel shares, a 9.9% stake it agreed to buy in August 2025 for $8.9 billion at $20.47 a share, paid for with $5.7 billion in CHIPS Act grants awarded but not yet paid and $3.2 billion from the Secure Enclave program. That stake was worth about $39.9 billion before the drop and about $28.5 billion after it. Intel forecast fourth-quarter revenue of $15 billion to $16 billion, against analyst estimates of about $17 billion. Finance chief David Zinsner said 2027 will not bring positive free cash flow. Chief executive Lip-Bu Tan said customers "began signaling a PC slowdown based on the memory prices and availability," and said a couple of customers for its factories would be ready to announce in the next two quarters. The Nasdaq fell 2.9%, and Nvidia 4.2%.
Intel shares fell 28.6% in one session, closing at $65.76 after ending the previous session at $92.07. The Associated Press reported it was the stock's worst drop since 1974.
In August 2025 the U.S. government agreed to buy 433.3 million Intel shares, a 9.9% stake, for $8.9 billion at $20.47 a share, according to Intel's announcement at the time. The purchase was funded with $5.7 billion in CHIPS and Science Act grants that had been awarded to Intel but not yet paid, and $3.2 billion awarded under the Secure Enclave program, a Defense Department effort to produce secure chips. Intel had already received $2.2 billion in CHIPS grants. Under the deal the government holds no board seat and agreed to vote with Intel's board, with limited exceptions. It also received a five-year warrant, at $20 a share, for another 5% of Intel, exercisable only if Intel stops owning at least 51% of its foundry business.
At the Oct. 29 close the government's shares were worth about $39.9 billion. At the Oct. 30 close they were worth about $28.5 billion, Yahoo Finance calculated, still more than three times the purchase price.
The drop followed Intel's quarterly report on Oct. 29. The company posted third-quarter revenue of $16.5 billion, up 21% from a year earlier, and forecast fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of 25 cents a share. Analysts had expected about $17 billion and 43 cents.
"In recent weeks, our customers began signaling a PC slowdown based on the memory prices and availability," Tan told analysts. "We see the PC slowdown continuing at least through the first half of next year," finance chief David Zinsner said in the company's release. Intel's PC chip unit brought in $8.1 billion in the quarter, down 5% from a year earlier, while its data center and AI unit grew 78% to $7.3 billion. Tan also said "an unfortunate and tragic accident led to an extended shutdown in our Israel factory" earlier this month, which will affect fourth-quarter shipments of 10-nanometer server chips.
Intel is producing its most advanced chips, made on its 18A process, at a new fab in Arizona. Its next fab there is expected to begin operating in 2028. Asked about outside customers for its factories, Tan said, "we're going to have a couple of customers ready to announce in the next 2 quarters." Zinsner told analysts that 2027 will be an investment year with negative free cash flow.
The selloff spread across the industry. The Nasdaq Composite fell 2.9% to 25,437. Nvidia fell 4.2% to $204.64, AMD 10.9%, Qualcomm 11.1% and Dell 10.8%. Amazon fell 1.4% after reporting quarterly profit below analysts' expectations. On Oct. 29 Alphabet fell more than 12%, its worst day on record.
Intel shares had more than doubled this year before the report.