Intel Shares Plunge After Outlook Hit by PC Slump, Supply

PC demand falls 5%, but data center revenue grows 78% and foundry revenue increases 58%.

Intel reported third-quarter 2026 revenue of $16.5 billion, a 21% year-over-year increase, and GAAP earnings per share of $0.60. The company's Data Center and AI segment saw a significant 78% revenue increase, contributing $7.3 billion, while Client Computing revenue decreased by 5%. Intel Foundry revenue grew 58% to $6.7 billion. Despite these gains, Intel's outlook for the fourth quarter of 2026 forecasts revenue between $15.0 billion and $16.0 billion, with EPS projected between $0.10 and $0.25, signaling a potential slowdown. This forecast comes amidst a continued PC industry slump expected to persist into the first half of next year. Intel also announced plans for a $23 billion public equity offering and strategic collaborations with Oracle and Google.

Intel's third-quarter results highlight a bifurcated market, with strong growth in its Data Center and AI (DCAI) and Intel Foundry segments contrasting sharply with a continued decline in its core Client Computing Group (CCPG). The 78% surge in DCAI revenue, reaching $7.3 billion, signals robust demand for server and AI-focused processors, indicating a successful pivot towards higher-margin, performance-driven markets. Similarly, the 58% increase in Intel Foundry revenue to $6.7 billion underscores progress in its foundry services, attracting external chip manufacturing clients.

Conversely, the 5% year-over-year dip in CCPG revenue to $8.1 billion reflects the ongoing challenges in the PC market, a trend Intel expects to continue through the first half of 2027. This dual performance presents Intel with both significant opportunities in emerging AI and cloud infrastructure markets and persistent headwinds in its traditional PC business, necessitating strategic resource allocation to capitalize on growth areas while navigating market saturation.