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Intel Sinks After Hours as Weak Fourth-Quarter Forecast Overshadows Data Center Surge
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Third-quarter revenue rose 21% on AI and foundry demand, but a softer PC outlook and lower margin guidance sent the stock down about 17% in extended trading.
By Noris Ortiz ·
Intel shares tumbled in extended trading on Thursday after the chipmaker forecast fourth-quarter revenue below Wall Street expectations, as a slowdown in personal computer sales outweighed rapid growth in its data center and foundry businesses.
The stock fell more than 20% after the results were released shortly after the 4 p.m. ET close, before paring losses to a decline of about 17% [1]. Intel projected fourth-quarter revenue of $15 billion to $16 billion, compared with the roughly $17 billion analysts had expected [1].
The outlook overshadowed a third quarter that was stronger than forecast. Intel reported revenue of $16.5 billion, up 21% from a year earlier [2]. Earnings per share came to $0.60 on a GAAP basis and $0.52 on an adjusted basis [2], and Yahoo Finance reported that the profit figure beat expectations [1]. GAAP gross margin widened by 4.8 percentage points to 43.0%, and adjusted gross margin rose 4.1 points to 44.1% [2].
The mix of growth inside the company shifted sharply toward AI-related demand. Revenue in the Data Center and AI group rose 78% to $7.3 billion, and Intel Foundry revenue climbed 58% to $6.7 billion [2]. The Client Computing and Physical AI group, which includes PC processors, saw revenue fall 5% to $8.1 billion [2].
The PC business is the main source of the weaker outlook. According to Yahoo Finance, Intel pointed to a worse-than-expected drop in PC revenue, citing difficult comparisons with last year, when the end of Microsoft's support for Windows 10 pushed businesses to buy new machines, as well as rising PC prices that are holding back demand [1]. Chief Financial Officer David Zinsner said the PC slowdown is expected to last at least through the first half of next year, according to the company's release [2]. The release also lists industry-wide shortages of substrates and memory among its supply chain risks [2].
Chief Executive Lip-Bu Tan said "demand for our CPUs remains robust" despite the near-term PC headwinds, and that the company's immediate priority is freeing up supply to meet demand for its Xeon server processors [2].
Profitability is also set to step down in the current quarter. Intel guided to a fourth-quarter GAAP gross margin of 37.1% and an adjusted gross margin of 38.0%, both well below the third-quarter levels, along with GAAP earnings of $0.10 a share and adjusted earnings of $0.25 a share [2]. The company said it completed a $23 billion public equity offering [2].
The report added to a difficult day for large technology stocks. Earlier on Thursday, the Nasdaq Composite fell 1.38% as Alphabet suffered its worst session since its 2004 market debut, and Amazon also fell sharply in after-hours trading following its own results [1].
What to watch next: whether the after-hours decline carries into Friday's regular session, any further detail from management on how long the PC slowdown and component shortages may last, and whether the strength in data center and foundry revenue can keep offsetting weakness in the client business into 2027.
Sources:
[1] Yahoo Finance, "Stock market today: Dow, S&P 500, Nasdaq slip as Alphabet stock sinks 12% and AI jitters return", October 29, 2026. https://finance.yahoo.com/markets/live/stock-market-today-thursday-october-29-dow-sp-500-nasdaq-alphabet-microsoft-earnings-130305714.html
[2] Intel Corporation, "Intel Reports Third-Quarter 2026 Financial Results", October 29, 2026. https://www.intc.com/news-events/press-releases/detail/1786/intel-reports-third-quarter-2026-financial-results
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.