Intel Corp. (NASDAQ:INTC) stock plunged nearly 26% in Friday's premarket trading as investors reacted to disappointing fourth-quarter guidance and a broader technology sell-off.

Nasdaq futures fell 2.23%, while S&P 500 futures declined 0.94%.

Intel beat third-quarter expectations but issued a fourth-quarter outlook well below Wall Street estimates, raising concerns about PC demand, rising memory costs and the company's ability to sustain growth in its data center and foundry businesses.

Beats Q3 Estimates, Guidance Disappoints

Intel reported third-quarter adjusted earnings of 52 cents per share, beating analysts' consensus estimate of 40 cents.

Revenue of $16.51 billion topped Wall Street's estimate of $16.47 billion.

For the fourth quarter, Intel forecast adjusted earnings of 25 cents per share, below the 43-cent consensus estimate. The company expects revenue of $15 billion to $16 billion, compared with expectations of $17.05 billion.

Intel CEO Lip-Bu Tan said the company's third-quarter results reflected improved execution, progress in expanding supply and advances in process technology.

Despite near-term weakness in the PC market, Tan said CPU demand remains strong. Intel is prioritizing additional Xeon supply to meet robust demand while improving its product lineup and roadmap.

He added that the company is focused on capitalizing on these opportunities to drive sustainable growth and create long-term shareholder value.

Benchmark Flags PC Weakness and Memory Pressures

Benchmark analyst Cody Acree described Intel's third-quarter results as solid but said its fourth-quarter outlook represented a significant miss.

Acree told CNBC that weakness was concentrated in PCs and memory-related pressures.

He estimated Intel's fourth-quarter forecast fell short of expectations by about 20 cents per share and nearly $2 billion in revenue.

Acree said Intel remains heavily dependent on PCs, where rising memory costs are pressuring manufacturers and potentially delaying purchases.

He expects those supply-demand challenges to continue into 2027.

However, Acree said Intel's data center business remains on track, with results exceeding estimates by about $500 million. Its foundry business also performed better than expected.

He believes agentic AI could boost Intel's CPU business as demand grows for processors supporting AI workloads.

Acree also highlighted increasing customer engagement around Intel's 14A manufacturing process, suggesting the company could eventually become a meaningful competitor to Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM).

Bernstein Warns of Sharp PC Decline

Bernstein senior analyst Stacy Rasgon said Intel delivered relatively solid quarterly results, with revenue near expectations and margins exceeding estimates. However, he described its fourth-quarter guidance as extremely weak.

Rasgon told CNBC that Intel forecast approximately $15.5 billion in revenue, compared with Wall Street expectations of roughly $17 billion.

He expects Intel's PC client business could decline at least 20% sequentially in the fourth quarter, even as data center revenue potentially grows about 10%.

Rasgon attributed the PC weakness to memory shortages that are constraining system production.

He also raised concerns about a potential inventory correction after CPU shipments outpaced underlying PC demand in recent quarters.

Rasgon warned that memory supply challenges could persist through at least the first half of 2027, potentially affecting smartphones and other consumer electronics.

Intel's Turnaround Remains Uncertain

Rasgon said investors are betting on Intel's multiyear transformation rather than its near-term earnings performance.

While acknowledging improvements in Intel's balance sheet and stronger server demand, he questioned the company's potential earnings from expanding its third-party foundry business.

Acree offered a more optimistic assessment, arguing that growing AI-related CPU demand and foundry progress could support Intel's longer-term recovery despite near-term PC weakness.

INTC Stock Price Activity: Intel shares were down 25.72% at $68.39 during premarket trading on Friday, according to market data.