Intel tumbles as memory shortages weaken PC outlook

Intel shares fell ~29% on Friday, their worst session since 1974, after a weak forecast overshadowed quarterly revenue of $16.5B, up 21%. The selloff erased roughly $140B in market value. Intel projected Q4 revenue of $15-16B, versus ~$17.1B expected, and a gross margin of 38%, down from 44.1% last quarter.

Heavy memory buying by AI data centers is raising costs for laptops and desktops, discouraging upgrades and reducing demand for Intel processors. Intel expects the PC market to shrink 12% this year and another 10% in 2027, with the memory crunch continuing next year. Its data center and AI business grew 78% last quarter to $7.3B, but factory capacity and packaging shortages are limiting server chip shipments. Significant relief is not expected until the back half of 2027.

Memory suppliers are benefiting from the same pressure. Samsung’s Q3 operating profit reached 107.4T won (~$80B), compared with 12.2T won a year earlier, as DRAM prices rose ~20% in a single quarter. Its entire 2027 HBM supply is sold out, and management expects shortages through 2028. The boom remains cyclical: additional factories or resistance to higher prices could ease shortages. Intel nevertheless expects revenue and margins to improve in 2027.