Intel earnings rose in the third quarter of 2026, but a weaker-than-expected fourth-quarter revenue forecast sent shares down about 21% in late trading on October 29. The chipmaker faces a slowing PC market and supply constraints affecting its data center business.
Key Takeaways
- Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below the $17 billion analyst average.
- Third-quarter revenue rose 21% year over year as data center growth offset weaker PC-chip sales.
- Intel expects the PC slowdown to continue at least through the first half of 2027.
Intel earnings and fourth-quarter outlook
In its third-quarter results and outlook, Intel forecast fourth-quarter adjusted earnings of $0.25 per share, below the $0.43 analysts had projected. Its revenue forecast was also below the analyst average of $17 billion.
For the quarter ended September 26, revenue was $16.5 billion, in line with the analyst average. Adjusted earnings were $0.52 per share, above the $0.41 estimate. Reported earnings under generally accepted accounting principles were $0.60 per share.
Intel projected an adjusted gross margin of 38% for the fourth quarter. These figures are forecasts, not completed results.
| Item | Details |
|---|---|
| Data center and AI, Q3 2026 | $7.3 billion revenue, up 78% year over year |
| Client division, Q3 2026 | $8.1 billion revenue, down 5% year over year |
| Intel Foundry, Q3 2026 | $6.7 billion revenue, up 58% year over year |
Data center growth offsets weaker PC sales
Intel’s data center and AI business grew sharply in the third quarter, while its client division, which makes PC chips, reported lower sales. Foundry revenue also increased.
The segment figures include transactions between Intel businesses, so they should not be added together to calculate company revenue.
Supply shortages and investment plans
Chief Executive Officer Lip-Bu Tan said shortages of some raw materials and a factory shutdown in Israel constrained the data center business. The factory had been closed for two weeks after a fire and was expected to restart within days.
Chief Financial Officer David Zinsner said the shutdown would cost about $300 million in lost fourth-quarter revenue, with a similar shortfall expected in the first quarter of 2027.
Intel expects spending on plants and equipment of about $20 billion in 2026, followed by a significant increase in 2027. Zinsner said the company would likely not generate free cash flow in 2027 as it invests to expand output.
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