Intel Q3 Results: Adjusted Earnings Beat Estimates As Data Centre And AI Revenue Surges 78%, But Weak Q4 Guidance Hits Shares

Intel's share price fell more than 20% in extended trading on Thursday, wiping out some of the gains made by the chipmaker this year. The sell-off came after the company projected weaker-than-expected revenue and earnings for the fourth quarter of 2026. This came despite the company reporting adjusted earnings of 52 cents per share for the third quarter, against estimates of 40 cents. Revenue stood at $16.51 billion, up 21% from a year earlier.

The market appeared more concerned about what Intel expects in the coming months than what it achieved in the latest quarter. Production difficulties and a slowdown in the PC market have added to those concerns.

What Triggered The Fall In Intel Stock?

Intel's fourth-quarter guidance was well below Wall Street expectations. The company expects revenue between $15 billion and $16 billion, compared with analyst estimates of around $17.1 billion. Its adjusted earnings forecast of 25 cents per share also fell short of the expected 43 cents.

CFO David Zinsner said the weakness in the PC market was likely to persist through at least the first half of 2027. He added that Intel would remain cautious about spending while working to improve production capacity and meet customer demand.

There is another problem affecting the company's supply. An explosion at Intel's fabrication facility in Israel earlier in October killed two workers and seriously injured another. The incident forced an extended shutdown at the plant, affecting shipments of 10-nanometre chips. Zinsner estimated that the disruption could cost Intel around $600 million in lost revenue over two quarters.

AI Business Grows While PC Revenue Slips

Not all parts of Intel's business struggled during the quarter. Revenue from its Data Centre and AI division jumped 78% year-on-year to $7.3 billion. Demand for CPUs, which are increasingly being used to manage workloads in AI systems, has provided some support to the business.

The picture was different in its consumer computing segment. Revenue from the Client Computing and Physical AI Group declined 5% to $8.1 billion. Intel Foundry, meanwhile, reported a 58% increase in revenue to $6.7 billion.

The company is also trying to attract customers to its advanced chip manufacturing operations. Its 18A technology has entered high-volume production at its Arizona facility. CEO Lip-Bu Tan said Intel expects to announce two customers for its upcoming manufacturing technologies over the next two quarters.

For now, investors will be watching whether growth in AI-related demand can offset weakness in the PC business. Intel's next set of results should offer a better indication of how quickly its production challenges can be addressed and whether its earnings can recover.

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