Intel shares plunge 23% on cash burn warning and weak forecast

Intel shares plunged 23% in after-hours trading after Intel warned it would burn cash this year due to the faltering PC market, manufacturing bottlenecks, and heavy spending on production expansion. The company forecast fourth-quarter revenue between $15 billion and $16 billion, below analysts' average estimate of $17.07 billion, and adjusted profit of 25 cents per share, trailing estimates of 43 cents. Intel also cited an October explosion at its Israel plant, expected to erase roughly $600 million in revenue over two quarters and reduce AI server chip supplies. CEO Lip-Bu Tan acknowledged failing to meet strong customer demand, citing manufacturing shortages and an unprecedented memory crunch. The gloomy outlook dragged other chip stocks down 1% to 6% in extended trading. Intel expects PC chip revenue to decline in the mid-20% range in the fourth quarter, and weak demand could persist through the first half of 2027. The company plans to spend $20 billion in capital this year, with spending rising sharply in 2027.