Intel tumbles 29.0% as Israel factory blast leaves costs unclear

How far did Intel's stock fall?

Intel (Nasdaq: INTC) shares tumbled 29.0% on Friday, closing at $65.39. They had ended the previous session at $92.07.

Why it matters: The drop cost Intel $130 billion in market value, leaving the company worth $330 billion. Trading was heavy, with shares worth $27 billion changing hands.

By the numbers: The stock now sits 53.6% below its 52-week high of $140.94. Even so, $1,000 invested in Intel a year ago would now be worth $1,628.

The wider market lost ground too. The Nasdaq-100 fell 3.5%, the S&P 500 slid 1.8%, and the technology sector fund (XLK) tumbled 4.9%.

What happened at the Israel factory?

An explosion struck Intel's plant in Kiryat Gat, Israel, on Oct. 14. The blast killed and seriously injured workers at the site, according to local press reports.

The factory has been shut since then. Intel's latest regulatory filing said production was expected to restart by the end of October.

On its Oct. 29 earnings call, finance chief David Zinsner said an early assessment points to lost revenue in the current period. He said a similar hit was likely early in 2027.

Intel said almost all of the near-term lost revenue involves server chips, where demand already runs ahead of supply. The company also expects the blast to reduce its gross margin, the share of sales left after production costs.

Why can't Intel put a price on the damage?

Lost sales are only part of the bill. Intel expects charges for scrapped inventory, cleanup, and repairs at the site. It also expects extra costs from running the factory below capacity.

Weaker output during the shutdown and recovery could also raise manufacturing costs and cut profit into 2027, according to the filing. These costs may overlap with the revenue estimate, so adding them together could overstate the damage.

Intel's guidance, its own forecast for its next results, already includes some of these costs. But the company has not given a full dollar estimate for the extra charges. Intel said it is "currently unable to reasonably estimate the financial impact from the incident."

What could change the final cost?

Insurance could cover some of the losses, Intel said, though it cannot yet say how much. The company may also make up some lost output at other factories in its global network.

Intel said the final cost will depend on property damage, how long repairs take, how long operations stay disrupted, and what insurers pay.

The next marker is the restart of production, which Intel's filing expected by the end of October. Intel has not said when it will publish a fuller cost estimate.