Key points
- Intel's Q4 revenue forecast midpoint is $1.6 billion below estimates
- Intel expects a $300 million Q4 sales hit from its Israel shutdown
- Intel sees 2026 PC unit sales falling about 12%
Intel (INTC) forecast fourth-quarter revenue below Wall Street's expectations on Oct. 29, even as its third-quarter earnings beat estimates. Intel expects revenue of $15 billion to $16 billion, compared with the $17.07 billion analysts expected, according to LSEG data cited by Reuters.
Intel shares fell 23% to $70.82 in after-hours trading as of 7:51 p.m. ET, after closing the regular session at $92.07.
Third-quarter revenue rose 21% to $16.51 billion, Reuters reported, in line with the $16.50 billion analysts expected. Adjusted earnings were 52 cents a share, according to Intel's earnings release, above the 40 cents analysts expected.
Intel forecast adjusted fourth-quarter earnings of 25 cents a share. Analysts had expected 43 cents.
Intel's Data Center and AI unit had its strongest revenue growth in 15 years in the third quarter. Intel expects revenue from its PC chip unit to fall more than 20% from the third quarter to the fourth, a decline of more than $1.6 billion. Its forecast also includes a revenue hit of about $300 million from the Israel shutdown.
Intel blamed the PC slowdown on higher memory prices, part of a supply shortage Tan said is driven by demand for AI. Memory makers are profiting from the same shortage. Samsung Electronics reported record quarterly operating profit of 107.4 trillion won ($80.3 billion) on Oct. 29, as we reported.
| Metric | Q3 2026 | Change from a year earlier |
|---|---|---|
| Revenue | $16.5 billion | +21% |
| Data Center and AI revenue | $7.3 billion | +78% |
| Client Computing and Physical AI revenue | $8.1 billion | -5% |
| Intel Foundry revenue | $6.7 billion | +58% |
| Adjusted gross margin | 44.1% | up from 40.0% |
| Adjusted earnings per share | $0.52 | up from $0.23 |
Source: Intel third-quarter 2026 earnings release, Oct. 29, 2026. Foundry revenue includes sales to Intel's own product groups.
Intel expects a $300 million sales hit from the Israel shutdown
Chief Executive Lip-Bu Tan said on the earnings call that "early this month an unfortunate and tragic accident led to an extended shutdown in our Israel factory." The explosion at the plant in Kiryat Gat killed two people and seriously injured one, Calcalist reported.
Chief Financial Officer David Zinsner said the fourth-quarter forecast includes a hit of about $300 million to revenue and 200 basis points to gross margin from the shutdown. Almost all of the lost revenue comes from 10-nanometer server chips, he said.
Zinsner told analysts the plant had been "shut down for about two weeks" and that Intel expects to start production again by the end of this week. He said the revenue impact is "likely to be similar in the first quarter," according to a call transcript published by Benzinga.
Intel expects its PC chip revenue to drop more than 20% in the fourth quarter
Revenue from Intel's PC chip unit fell 9% from the second quarter to $8.1 billion. Reuters reported that analysts had expected $8.98 billion. Intel expects the unit's revenue to fall more than 20% from the third quarter to the fourth.
Tan said PC makers are cutting their inventories as rising memory prices push up the cost of new computers. "The pace of the PC correction has accelerated over the last two months as our OEM partners are aggressively managing inventory to match the softer sell-through," he said.
Intel now expects PC unit sales across the industry to fall about 12% in 2026, with second-half units down more than 20%. It is planning for a decline of about 10% in 2027.
In the release, Zinsner said, "we see the PC slowdown continuing at least through the first half of next year."
Data center revenue grew 78%
Revenue from Intel's Data Center and AI unit rose 78% to $7.3 billion. Zinsner called it the company's "strongest data center revenue growth in 15 years." He said demand for the unit's products "continues to meaningfully exceed available supply." Tan cited limits on output from Intel's Intel 3 manufacturing process and an industry-wide shortage of advanced packaging substrates.
Intel expects the unit's revenue to grow by a mid-teens percentage from the third quarter to the fourth. The company also expects server CPU units across the industry to grow more than 30% in both 2026 and 2027.
Intel said it will spend $20 billion on gross capital expenditures in 2026 and expects 2027 spending to be "up strongly." The company completed a $23 billion stock sale in August. This week, it announced plans to buy quantum software company Classiq, a deal we covered on Oct. 26.
Intel shares had risen nearly 150% this year
Intel ended 2025 at $36.90. The stock closed at $92.07 on Oct. 29, down 3.6% on the day and up nearly 150% for the year. At $70.82 after hours, the shares were still up about 92% from the end of 2025.
Earlier this month, Intel shared specifications for its D-Series AI inference card. Zinsner said customer interest in the card and in Intel's Clearwater Forest server chips is running "ahead of our initial expectations."
