Intel shares suffered their biggest decline in 50 years, losing more than $30 billion in market value in a single day

Intel The stock on Friday suffered its worst one-day decline since 1974, wiping out more than $30 billion in market value as the chip giant announced drastic measures to fund a costly turnaround. The company suspended its dividend and plans to lay off 15% of its workforce amid growing concerns about its ability to compete with rivals such as Taiwan Semiconductor Manufacturing Company (TSMC).
Intel shares fell 26% to close at $21.48, their lowest since 2013. The company’s disappointing outlook and cost-cutting measures have raised serious doubts about its future. According to a Reuters report, Bernstein analyst Stacy Rasgon described Intel’s situation as “approaching existential.”
To shore up its financial position, Intel aims to raise $40 billion in cash by the end of 2025 through cost cutting, government grants and partnerships. But analysts warn it could take years for the company to turn things around.
Once the world’s leading chipmaker, its “Intel Inside” logo was a valuable marketing feature for personal computers in the 1980s and 1990s. Part of the Four Horsemen of the dotcom era—along with Cisco Systems, Microsoft, and Dell—Intel’s stock market value peaked at nearly $500 billion in 2000, then plummeted that same year and never recovered.

Weak employment data raises fears of US economic slowdown

The broader chip industry also experienced a recession, with other chipmakers reporting declines for a second straight day. Weak jobs data fueled fears of a U.S. economic slowdown, leading to expectations of a more aggressive rate cut by the Federal Reserve.
In addition, concerns have been raised about the sustainability of AI investments following the disappointing results of tech giants. Amazon and Alphabet, contributed to the market decline.

AI Pain for Intel

Intel, once a dominant force in the chip industry, has struggled to maintain its leadership position in recent years, with the rise of mobile devices and increased demand for AI chips challenging the company’s core business.
The company’s ambitious plan to invest $100 billion in U.S. manufacturing, backed by government funding, is a key part of its restructuring strategy. But the large expenses and potential delays in reaping the benefits have raised concerns among investors.
As Intel grapples with its challenges, bondholders are also showing signs of unease. The company’s bond yields have risen, indicating investor concerns about its financial health and potential need for additional debt.