SANTA CLARA, California: Intel shares plunged 30% Friday and headed for their biggest one-day decline on record after a weak revenue forecast and warnings over cash flow deepened concerns about the mounting costs of the artificial intelligence boom.

The decline was on course to erase more than $146 billion from Intel's market value and triggered a broader selloff in semiconductor and technology stocks around the world.

The major PC chip supplier on Thursday forecast fourth-quarter revenue of $15 billion to $16 billion, more than $1 billion below market estimates of $17.07 billion, according to LSEG data. The company also said it does not expect positive cash flow this year.

The warning raised concerns across a technology industry reliant on consumer device sales, including PC makers, smartphone companies and gaming businesses, as AI-driven demand sends memory prices higher.

Sentiment toward technology stocks was already fragile after results from Meta and Alphabet showed how the AI infrastructure race was turning technology companies that once carried little debt into heavy spenders increasingly reliant on borrowing.

Amazon added to those concerns Thursday by reporting a large cash outflow and signalling higher capital expenditures next year on top of already substantial spending in 2026.

"The market is in a sell first, ask questions later mood right now, and Intel's warning has given investors an easy excuse to take some money off the table across chip stocks," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

Intel's plunge was set to wipe more than $146 billion from its market capitalisation. The U.S. government, its largest shareholder after taking a 10% stake in August last year, faced a nearly $12 billion decline in the value of its holdings.

Concerns also spread to credit markets, with the cost of insuring Intel's debt against default reaching an all-time high. Five-year credit default swaps widened 17.5 basis points to 124.75 and were heading for their biggest one-day increase since October 2022, Markit data showed.

Intel had $21.84 billion in cash and cash equivalents at the end of September against $46.32 billion in long-term debt.

The selloff spread across the semiconductor industry. Shares of Advanced Micro Devices, Arm, Qualcomm, Nvidia, Broadcom and Micron fell between 4% and 12%.

Europe's ASML dropped more than 6%, while Taiwan's TSMC fell nearly 2%. China's tech-heavy STAR50 index hit a more than two-month low.

South Korea's AI-sensitive KOSPI slid 3.5%, while Samsung Electronics lost 3%. U.S. server makers Dell Technologies, Hewlett Packard Enterprise and Super Micro Computer fell between 6% and 11%.

Friday's decline followed a sharp rally in Intel shares, which had more than doubled this year after gaining more than 80% last year.

Surging demand for processors used to power AI agents and chatbot responses had helped Intel benefit from the AI boom, while its effort to become a major contract chip manufacturer has also gained momentum.

However, spending on its manufacturing business is weighing on cash flow, while supply disruptions have limited its ability to capitalize on growing demand for data-center chips.

Intel's PC chip business, which accounted for roughly half of its third-quarter revenue, has also come under pressure from rising memory prices as suppliers shift production toward high-bandwidth chips used in AI systems.

Seaport Research Partners analyst Jay Goldberg said the selloff reflected "a loss of faith in management's credibility."

"Intel is producing too many chips for consumer PCs in the worst PC market in 15 years, while it is not making enough chips for AI servers in the biggest growth cycle ever for semis. Bad planning is the cause."