Intel experienced one of its worst trading days on Friday, with the stock price plummeting by about 28% due to the chip giant's fourth-quarter outlook falling short of expectations.

CNBC reports that this decline has reduced the value of Intel shares held by the U.S. government by $12 billion. The Trump administration facilitated the government's purchase of 10% of Intel's shares over a year ago. NVIDIA also made a significant purchase of Intel shares in 2025, and its stock price also fell slightly on Friday. Many companies in the tech industry, especially chip manufacturers, have also been involved in this round of selling.

However, as of now, Intel's stock remains a profitable investment for the government (the same is true for NVIDIA), as the stock has still risen by more than 70% this year, despite having fallen significantly from its highs in the summer.

The trigger for this round of selling was Intel's warning that its revenue for the fourth quarter was expected to be between $15 billion and $16 billion, whereas analysts had previously anticipated it to be around $17 billion. The company also warned that its gross margin would drop from 43% to 37%, and due to significant investment levels, it was not expected to generate positive cash flow.

The main issue Intel faces is that the artificial intelligence industry has consumed memory and other components, driving up the prices of PC, which in turn has dragged down sales of personal computers.

Intel CEO Chen Liwu warned during a teleconference, "Our customers are starting to send signals of PC slowdowns based on memory prices and supply conditions. Since the beginning of the year, the prices of end-systems have risen significantly, which has put additional pressure on already tight IT budgets."

The good news is that Intel's data center business revenue increased by 78% compared to the same period last year. However, this business is still limited until it increases production capacity at its wafer factories and secures more external customers; at the same time, it also has to compete with industry giant TSMC. Intel has already put a new factory in Arizona into operation, but the next one is not expected to be operational until 2028.