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Intel Logs Worst Daily Drop Since 1970s: Buy the Dip With ETFs?
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Key Takeaways
Intel plunged 29% after issuing weak guidance, raising questions about its turnaround prospects.
Strong AI and server demand boosted Intel's third-quarter results, but PC weakness remains a concern.
Intel's rich valuation has cooled, making Intel-heavy ETFs an alternative way to play a likely recovery.
Chip behemoth Intel's (INTC - Free Report) shares plunged 29% on Oct. 30, 2026, marking their worst single-day decline since the 1970s, per CNBC. The sharp selloff followed weaker-than-expected guidance from the chipmaker, which cited a plant shutdown in Israel and continued weakness in the PC market.Intel's client business is also facing memory shortages.
The steep decline is a major setback for the company, which has been trying to turn around its business after it missed out on the early stages of the artificial intelligence (AI) boom. INTC shares are up 29% over the past five years, compared with chip behemoth NVIDIA (NVDA - Free Report) ’s 588% gains (as of Oct. 30, 2026).
Before Thursday's earnings announcement, Intel shares had enjoyed a strong rally since April this year. The rally was supported by rising demand for central processing units (CPUs), which are becoming increasingly important for agentic AI workloads. However, the disappointing outlook quickly changed investor sentiment.
AI Spending Concerns Add to Investor Nervousness
Intel's selloff comes at a time when investors are questioning whether massive AI investments by big technology companies will generate adequate returns.
Weak PC Market Weighs on Intel's Outlook
A key reason behind Intel's cautious forecast is the slowdown in the PC market. Surging prices of memory chips and other components are putting pressure on the industry. Management expects the PC slowdown to continue at least through the first half of next year.
Intel expects adjusted earnings of 25 cents per share in the current quarter, on revenue of $15 billion to $16 billion. Both forecasts fell short of analysts' expectations. According to LSEG, analysts had projected earnings of 43 cents per share and revenue of $17.1 billion, as quoted on the same CNBC article.
Foundry Business Remains Critical to Intel's Turnaround
Intel's foundry business remains central to its turnaround strategy, although the segment has struggled to attract external customers. Foundry revenues climbed 58% year over year. External foundry revenues were $411 million, up $118 million sequentially, primarily due to a non-recurring customer program.
The company is the only U.S.-based manufacturer of advanced logic chips. This gives U.S. customers an alternative to Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract chipmaker, as mentioned by CNBC.
Intel's next Arizona fab is expected to begin operations by the end of 2028. However, the company has yet to secure external customers for its new chips.
Any Bright Points in the Earnings Results?
Intel’s third-quarter 2026 adjusted earnings and revenues beat the Zacks Consensus Estimate. Strong demand for server processors supported top-line growth despite weakness in the PC market.
Non-GAAP earnings surged 126.1% year over year to 52 cents per share, surpassing the consensus estimate of 39 cents. Revenues increased 20.9% to $16.51 billion, beating the consensus estimate of $16.44 billion.
Data Center and AI revenues jumped 78% year over year, reflecting strong demand across hyperscale, enterprise and neo-cloud customers.
AI PC revenues grew 35% year over year. Wildcat Lake processor shipments increased approximately 70% sequentially, with available supply selling out.
Bottom Line
The company may be making progress despite the challenges. Global memory shortages are already well known to all. However, Intel's valuation had become stretched, with a trailing 12-month price-to-earnings (P/E) ratio of 47.65X, compared with the semiconductor-general industry’s P/E of 22.60X.
The latest selloff probably corrected some of Intel's rich valuation. Intel's expected growth rate of more than 200% for this year outpaces the industry average of 12.7%. Intel is a strong-growth stock, though it falls short in terms of its Value Score.
Investors can consider buying the dip in Intel through ETFs with significant exposure to the stock. The ETF or basket approach minimizes company-specific concentration risks. INTC-heavy ETFs include Defiance Global Foundries ETF (AIFR - Free Report) , iShares Semiconductor ETF (SOXX - Free Report) , First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) , Invesco Semiconductors ETF (PSI - Free Report) and State Street SPDR NYSE Technology ETF (XNTK - Free Report) .
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Intel Logs Worst Daily Drop Since 1970s: Buy the Dip With ETFs?
Key Takeaways
Chip behemoth Intel's (INTC - Free Report) shares plunged 29% on Oct. 30, 2026, marking their worst single-day decline since the 1970s, per CNBC. The sharp selloff followed weaker-than-expected guidance from the chipmaker, which cited a plant shutdown in Israel and continued weakness in the PC market.Intel's client business is also facing memory shortages.
The steep decline is a major setback for the company, which has been trying to turn around its business after it missed out on the early stages of the artificial intelligence (AI) boom. INTC shares are up 29% over the past five years, compared with chip behemoth NVIDIA (NVDA - Free Report) ’s 588% gains (as of Oct. 30, 2026).
Before Thursday's earnings announcement, Intel shares had enjoyed a strong rally since April this year. The rally was supported by rising demand for central processing units (CPUs), which are becoming increasingly important for agentic AI workloads. However, the disappointing outlook quickly changed investor sentiment.
AI Spending Concerns Add to Investor Nervousness
Intel's selloff comes at a time when investors are questioning whether massive AI investments by big technology companies will generate adequate returns.
Weak PC Market Weighs on Intel's Outlook
A key reason behind Intel's cautious forecast is the slowdown in the PC market. Surging prices of memory chips and other components are putting pressure on the industry. Management expects the PC slowdown to continue at least through the first half of next year.
Intel expects adjusted earnings of 25 cents per share in the current quarter, on revenue of $15 billion to $16 billion. Both forecasts fell short of analysts' expectations. According to LSEG, analysts had projected earnings of 43 cents per share and revenue of $17.1 billion, as quoted on the same CNBC article.
Foundry Business Remains Critical to Intel's Turnaround
Intel's foundry business remains central to its turnaround strategy, although the segment has struggled to attract external customers. Foundry revenues climbed 58% year over year. External foundry revenues were $411 million, up $118 million sequentially, primarily due to a non-recurring customer program.
The company is the only U.S.-based manufacturer of advanced logic chips. This gives U.S. customers an alternative to Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract chipmaker, as mentioned by CNBC.
Intel's next Arizona fab is expected to begin operations by the end of 2028. However, the company has yet to secure external customers for its new chips.
Any Bright Points in the Earnings Results?
Intel’s third-quarter 2026 adjusted earnings and revenues beat the Zacks Consensus Estimate. Strong demand for server processors supported top-line growth despite weakness in the PC market.
Non-GAAP earnings surged 126.1% year over year to 52 cents per share, surpassing the consensus estimate of 39 cents. Revenues increased 20.9% to $16.51 billion, beating the consensus estimate of $16.44 billion.
Data Center and AI revenues jumped 78% year over year, reflecting strong demand across hyperscale, enterprise and neo-cloud customers.
AI PC revenues grew 35% year over year. Wildcat Lake processor shipments increased approximately 70% sequentially, with available supply selling out.
Bottom Line
The company may be making progress despite the challenges. Global memory shortages are already well known to all. However, Intel's valuation had become stretched, with a trailing 12-month price-to-earnings (P/E) ratio of 47.65X, compared with the semiconductor-general industry’s P/E of 22.60X.
The latest selloff probably corrected some of Intel's rich valuation. Intel's expected growth rate of more than 200% for this year outpaces the industry average of 12.7%. Intel is a strong-growth stock, though it falls short in terms of its Value Score.
Investors can consider buying the dip in Intel through ETFs with significant exposure to the stock. The ETF or basket approach minimizes company-specific concentration risks. INTC-heavy ETFs include Defiance Global Foundries ETF (AIFR - Free Report) , iShares Semiconductor ETF (SOXX - Free Report) , First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) , Invesco Semiconductors ETF (PSI - Free Report) and State Street SPDR NYSE Technology ETF (XNTK - Free Report) .