Intel Shares Plunge 20% on Weak Outlook

According to Intel’s third-quarter 2026 financial results released on October 29, the company reported revenue of $16.51 billion, up 21% year over year and slightly above analysts’ expectations of $16.5 billion. Adjusted earnings per share reached $0.52, exceeding the estimated $0.40.

However, Intel’s Client Computing and Physical AI Group revenue declined 5% year over year to $8.1 billion, reflecting continued weakness in the global PC market. Meanwhile, Data Center and AI revenue surged 78% to $7.3 billion, supported by growing demand for AI infrastructure.

For the fourth quarter, Intel forecast revenue of $15 billion to $16 billion and adjusted EPS of $0.25, both below analysts’ expectations of $17.1 billion and $0.43, respectively. The company attributed the cautious outlook partly to a slowdown in the PC market, which is expected to continue into the first half of 2027 amid rising memory and component costs.

Intel CFO David Zinsner also said that an explosion at the company’s Israeli wafer fabrication facility could reduce revenue by approximately $600 million over two quarters. The company expects to gradually increase production at the facility.

Despite near-term challenges, Intel continues to invest in advanced semiconductor manufacturing. Its Arizona facility has begun high-volume production using the 18A process, while its next-generation 14A technology could attract major external chip customers seeking alternatives to TSMC.

Intel also expects continued demand for its CPUs as agentic AI applications expand. Meanwhile, Oracle recently announced plans to deploy Intel’s next-generation Xeon server processors as part of its expanding AI data center infrastructure.