Intel plunged 28.58% overnight, its worst single-day drop since 1974—and this wasn’t an earnings miss; expectations were simply too high, and the stock got knocked back down.
Let’s be clear about the bullish case first: the third quarter wasn’t bad. Revenue was $16.5 billion, up 21% year over year; data center and AI revenue was $7.3 billion, up 78%; and operating income rose to $2.522 billion from $683 million a year earlier. The CEO also said server CPU shipments are expected to grow more than 30% in both 2026 and 2027, with AI orders booked through next year. The fundamentals haven’t collapsed.
The bears were the ones who sent the stock tumbling: fourth-quarter guidance called for earnings of just 25 cents per share and revenue of $15 billion to $16 billion, well below expectations of 43 cents and $17.1 billion. Client computing revenue is expected to fall more than 20% quarter over quarter. An incident at an Israeli wafer fabrication plant halted production for about two weeks, and the CFO expects it to shave another roughly $300 million off fourth-quarter revenue and cut gross margin by about 200 basis points. The market had already driven the stock higher—it was up about 150% since the start of the year before the earnings report. An 85-point report couldn’t live up to 95-point expectations.
The result: Intel closed at $65.76 on October 30, wiping out about $140 billion in market value in a single day. The Philadelphia Semiconductor Index fell 7.2%; AMD dropped 10.88%, Qualcomm 11.12%, and even Nvidia fell 4.22%.
My take: this is an expectations reset, not Intel’s fundamentals going to zero overnight—but don’t rush to catch a falling knife in a weak market. The key levels to watch are whether the stock can hold its $65.76 closing price and whether fourth-quarter revenue can meet the low end of guidance at $15 billion. Let’s talk about a bottom only after it gets back near its previous high; if it breaks below the $65 area, expect a deeper drop. What would change my view: supply recovers better than expected in the fourth quarter, or gross-margin guidance is raised. Only then would I call this an unjustified sell-off.
My framework remains unchanged: until $BTC reclaims and holds $79,400, treat rallies as rebounds; below $76,500, watch $75,000. In a weak market, one U.S. stock’s plunge doesn’t change that framework.
Do you think this is the start of an AI bubble deflating, or simply one stock whose expectations got way too stretched?
Let’s be clear about the bullish case first: the third quarter wasn’t bad. Revenue was $16.5 billion, up 21% year over year; data center and AI revenue was $7.3 billion, up 78%; and operating income rose to $2.522 billion from $683 million a year earlier. The CEO also said server CPU shipments are expected to grow more than 30% in both 2026 and 2027, with AI orders booked through next year. The fundamentals haven’t collapsed.
The bears were the ones who sent the stock tumbling: fourth-quarter guidance called for earnings of just 25 cents per share and revenue of $15 billion to $16 billion, well below expectations of 43 cents and $17.1 billion. Client computing revenue is expected to fall more than 20% quarter over quarter. An incident at an Israeli wafer fabrication plant halted production for about two weeks, and the CFO expects it to shave another roughly $300 million off fourth-quarter revenue and cut gross margin by about 200 basis points. The market had already driven the stock higher—it was up about 150% since the start of the year before the earnings report. An 85-point report couldn’t live up to 95-point expectations.
The result: Intel closed at $65.76 on October 30, wiping out about $140 billion in market value in a single day. The Philadelphia Semiconductor Index fell 7.2%; AMD dropped 10.88%, Qualcomm 11.12%, and even Nvidia fell 4.22%.
My take: this is an expectations reset, not Intel’s fundamentals going to zero overnight—but don’t rush to catch a falling knife in a weak market. The key levels to watch are whether the stock can hold its $65.76 closing price and whether fourth-quarter revenue can meet the low end of guidance at $15 billion. Let’s talk about a bottom only after it gets back near its previous high; if it breaks below the $65 area, expect a deeper drop. What would change my view: supply recovers better than expected in the fourth quarter, or gross-margin guidance is raised. Only then would I call this an unjustified sell-off.
My framework remains unchanged: until $BTC reclaims and holds $79,400, treat rallies as rebounds; below $76,500, watch $75,000. In a weak market, one U.S. stock’s plunge doesn’t change that framework.
Do you think this is the start of an AI bubble deflating, or simply one stock whose expectations got way too stretched?