Intel Stock Cut in Half in a Month After Strongest Server Growth in 15 Years

Intel (NASDAQ:INTC) fell 50.25% over the past month to $56.28, a drop that landed immediately after the company posted its strongest data center growth in 15 years. The collapse frames the central question for investors in the semiconductor sector's most consequential turnaround attempt: whether a rebuilt business centered on server demand can outrun a foundry arm that lost $1.85 billion in a single quarter.

The shares now trade only modestly above where they sat eight years ago. On an adjusted basis, the stock has gained just 33.47% over that period, while the S&P 500 returned 56.94% over five years alone. The context explains why the stakes are unusually high. In 2018, Intel's fortunes rested on x86 chips for PCs and servers. Since then, Advanced Micro Devices (NASDAQ:AMD) has taken market share, and Arm-based processors and AI accelerators have challenged the traditional CPU market.

The latest selloff followed third-quarter results that combined record server growth with a soft fourth-quarter outlook, heavy spending plans and a deepening PC slump.

What drove the record server numbers?

Data Center and AI revenue rose 78% to $7.32 billion in the third quarter. Segment operating income climbed to $3.04 billion from $964 million a year earlier. Total revenue rose 20.9% to $16.51 billion, and non-GAAP EPS of $0.52 beat the $0.40 estimate.

Management says demand "continues to meaningfully exceed available supply" and expects the industry to stay supply-constrained through 2027 and into 2028. That shortage, not a demand problem, is the operative constraint on the segment's near-term trajectory.

Intel puts a striking figure on the opportunity: the server CPU market could grow from $40 billion to more than $200 billion over five years as agentic workloads favor energy-efficient CPUs.

The customer base has widened beyond Intel's historical partners. NVIDIA (NASDAQ:NVDA) completed a $5 billion equity investment and picked Intel as the host CPU for its DGX Rubin NVL8 system. Oracle (NYSE:ORCL) signed a multiyear Xeon collaboration.

Sell-side analysts have responded. The consensus 2027 EPS estimate stands at $1.7987, compared with $1.4866 this year. Over the past 30 days, that estimate drew seven upward revisions and zero downward.

Why did the stock still fall 50%?

The counterweight sits in the foundry and the cash flow statement. Intel Foundry lost $1.85 billion in the quarter. External foundry revenue was just $411 million, and a nonrecurring program provided much of it. CFO David Zinsner was blunt about the year ahead: "I don't think this will be a year in which we see positive cash flow."

The near-term guidance also moved lower:

• Fourth-quarter revenue guidance: $15.0 billion to $16.0 billion
• Non-GAAP EPS guidance: $0.25
• Gross margin guidance: 38.0%

An incident at Intel's Israel factory alone costs roughly $300 million in revenue. Management sees PC units falling about 10% in 2027. A $23 billion equity offering raised the expected diluted share count to 5.44 billion, diluting existing holders even as the stock carries a forward P/E of 33.

The quarterly picture still contains one improving line. Foundry losses narrowed by $236 million sequentially last quarter, a metric the source flags as worth tracking.

What milestones decide the next move?

The case for caution rests on events that have not yet happened. Intel expects "a couple of customers ready to announce in the next two quarters" for the foundry. The company plans to deliver the Intel 14A 1.0 PDK (the process design kit external customers use to build chips on Intel's 14A node) early next year.

The product roadmap adds two more checkpoints. Diamond Rapids ramps in 2027. Nova Lake design wins are expected to reach twice those of Panther Lake at launch. Until those milestones arrive and the PC inventory correction ends, the earnings path stays cloudy.

The source identifies three specific conditions that would break the investment case: no named 14A customer appearing by mid-2027, Intel 3 yields stalling, or Data Center and AI growth slowing as supply increases.

What do analysts expect after the halving?

The consensus price target is $91.12, implying 61.9% upside from $56.28. The 49 covering analysts break down as follows:

• Strong Buy: 1
• Buy: 11
• Hold: 36
• Sell: 1

Price targets come with no guarantee, and the distribution — dominated by holds — reflects genuine uncertainty about the foundry milestones ahead.

The performance record explains both the skepticism and the recent attention. Shares are up 52.52% year to date, against 7.83% for the S&P 500. Over the past month, Intel fell 50.25% while the index slid 5.39%. A beta of 2.426 signals that swings of this magnitude should remain the baseline expectation for holders.

Does the reset price change the calculus?

At $56.28, the selloff has already priced in a weak fourth quarter and a cash-burning 2027 — both of which management disclosed openly. The source argues the market gives too little credit to a data center franchise guided to grow mid-teens sequentially even as client revenue falls more than 20%.

Over the next two to three quarters, the path higher runs through foundry customer announcements, the 14A PDK release and new Intel 3 capacity. External wins would validate the capital spending that bears call a waste; the $5 billion NVIDIA investment and the Oracle Xeon deal suggest at least part of the ecosystem has already moved in that direction.

The result is a market structure in which Intel trades at a price the market just cut in half while analysts keep raising earnings estimates. The resolution — or failure — of the 14A customer question by mid-2027 will likely determine which of those two signals the market decides to believe.