Intel Heads for Its Worst Day in Two Years, Erasing $128 Billion

Intel's stock was heading toward its worst session in two years, a sell-off that has cost shareholders roughly $128 billion in market value. The pressure is concentrated in the company's PC business, which is being squeezed from two directions at once.

The first pressure is cost. Higher memory-chip prices raise what PC makers pay to build machines, and that tends to show up in demand. When laptops and desktops become more expensive to produce, buyers either pay more or hold off, and either outcome can slow the shipments that carry Intel's processors.

The second pressure is budget. Corporate IT departments, a major source of business laptop purchases, have less money to spend on new hardware right now. For a chipmaker that relies on steady upgrade cycles in the enterprise market, that is a hard backdrop to face while component costs are also climbing.

Investors are now looking for evidence that PC demand is steadying or that Intel can keep its pricing intact. Until that picture clears, the PC division is likely to remain the main focus of concern around the stock.