Intel shares plunged 21% after the chipmaker's fourth-quarter guidance missed estimates by a wide margin, blaming a PC market slowdown and the fallout from a fatal fab explosion in Israel. Separately, Microsoft announced plans to raise $25 billion in bonds to fund its AI infrastructure buildout.
A turbulent evening for tech stocks unfolded Thursday after Intel issued a fourth-quarter outlook that badly missed Wall Street expectations, while Microsoft announced plans to raise $25 billion in new debt to fund its expanding artificial intelligence infrastructure.
Intel shares sank more than 21% in extended trading after the chipmaker guided for adjusted earnings of 25 cents per share on revenue of between $15 billion and $16 billion for the current quarter. Analysts polled by LSEG had been expecting earnings of 43 cents per share and revenue of $17.1 billion.
Third-quarter results were closer to estimates. Intel earned 52 cents per share, adjusted, on revenue of $16.51 billion, compared with analyst expectations of 40 cents and $16.5 billion, respectively. Revenue climbed 21% from $13.7 billion in the year-ago period.
The trouble was concentrated in Intel's client computing and physical AI group, where revenue fell 5% year over year to $8.1 billion, missing estimates. Data center and AI revenue, by contrast, jumped 78% to $7.3 billion.
Finance chief David Zinsner pointed squarely at the consumer PC market, which has softened under pressure from rising memory and component costs. Global PC shipments declined 4% in the second quarter from a year earlier, according to Counterpoint Research. "We see the PC slowdown continuing at least through the first half of next year," Zinsner said in the earnings release.
The guidance also reflects the financial impact of an explosion at an Intel fabrication facility in Israel that killed two workers and seriously injured a third earlier this month. Zinsner said the incident is expected to cost the company approximately $600 million in lost revenue spread across two quarters. CEO Lip-Bu Tan described the event as an "unfortunate and tragic accident" that caused an "extended shutdown" at the plant, affecting shipments of 10-nanometer chips.
Tan said Intel continues to see long-term demand for CPUs, particularly as agentic AI applications — such as Meta's Muse and OpenAI's Dots — rely on central processing units to orchestrate tasks. "Despite near term headwinds affecting the broader PC industry, we continue to see robust demand for CPUs and more broadly, for all our computing platforms in the long term," he said.
On the foundry side, Intel is now in high-volume production of its 18A chips at a new Arizona facility, positioning itself as a domestic alternative to TSMC. A second Arizona fab is expected to begin operations by the end of 2028. Intel currently has no major external customers for its advanced chips, though Tan said the company expects to announce a few within the next two quarters.
While Intel's results weighed on sentiment, Microsoft moved in the opposite direction on the capital markets front. The company announced pricing for $25 billion in new bonds on Thursday, leveraging its AAA credit rating from S&P to fund infrastructure expansion tied to AI demand from clients including Anthropic and OpenAI. The offerings are expected to close on November 4.
Microsoft is targeting $170 billion in capital expenditures for 2026. Finance chief Amy Hood said on the company's Wednesday earnings call that the debt markets represent an attractive funding channel. "We're fortunate to have access in the debt markets, given where our ratings are, and we haven't yet tapped that," she said.
Microsoft reported positive free cash flow for the quarter, differentiating it from several peers. Alphabet posted negative free cash flow of $9.07 billion in its most recent quarter — its second consecutive quarter in negative territory — while Amazon reported negative free cash flow and Meta also recorded a negative figure last week. Oracle separately announced plans to raise $10 billion in new debt on Wednesday.
The combined earnings news sent Nasdaq-100 futures down 1.7% Thursday evening, with S&P 500 futures sliding 0.7%. Amazon shares also fell more than 6% in extended trading after its third-quarter results missed expectations on both the top and bottom lines.
With Nvidia scheduled to report results in mid-November and Advanced Micro Devices set to release earnings next week, investors will be watching closely for further signals on whether the AI infrastructure buildout — and the spending assumptions underpinning it — remains on solid footing.
Marc Sabatini is a staff writer at TechEchelon covering enterprise software, cybersecurity, and the regulatory beats that shape both. He focuses on the deal flow and policy decisions that move markets.
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