Global Finance News
01 Nov 2026, 11:11
Intel Plunges 28% as Weak Q4 Outlook and PC Slowdown Overshadow Strong Q3 Results
Intel (NASDAQ: INTC) shares plunged about 28% following its third-quarter 2026 earnings report as investors focused on a sharply weaker fourth-quarter outlook, lower expected margins and management’s warning that the PC slowdown could continue through at least the first half of 2027.
Third-quarter results themselves were strong. Revenue increased 21% year over year to $16.5 billion, while non-GAAP EPS more than doubled to $0.52 from $0.23. Non-GAAP gross margin improved to 44.1% from 40.0%, and adjusted operating margin expanded to 19.6% from 11.2%.
Data Center and AI was the standout business, with revenue surging 78% to $7.3 billion, representing Intel’s strongest data center revenue growth in 15 years. Intel Foundry revenue also increased 58% to $6.7 billion. However, Client Computing and Physical AI revenue declined 5% to $8.1 billion, highlighting weakness in the PC market.
The main concern was Intel’s fourth-quarter outlook. The company expects revenue of $15.0 billion to $16.0 billion, implying a sequential decline from Q3’s $16.5 billion. More importantly, non-GAAP gross margin is expected to fall sharply to 38.0% from 44.1% in Q3, while adjusted EPS is projected at just $0.25 compared with $0.52 in the third quarter.
Management also warned that the PC slowdown is expected to continue through at least the first half of next year. At the same time, Intel plans to increase investments in capacity and working capital to address what it described as extraordinary demand for Xeon processors.
The 28% selloff therefore appears to reflect a substantial reset in near-term expectations. Despite strong Q3 revenue growth and accelerating data center demand, investors reacted negatively to the projected sequential revenue decline, roughly six-percentage-point contraction in adjusted gross margin, weaker Q4 earnings and prolonged PC-market headwinds.
Intel (NASDAQ: INTC) shares plunged about 28% following its third-quarter 2026 earnings report as investors focused on a sharply weaker fourth-quarter outlook, lower expected margins and management’s warning that the PC slowdown could continue through at least the first half of 2027.
Third-quarter results themselves were strong. Revenue increased 21% year over year to $16.5 billion, while non-GAAP EPS more than doubled to $0.52 from $0.23. Non-GAAP gross margin improved to 44.1% from 40.0%, and adjusted operating margin expanded to 19.6% from 11.2%.
Data Center and AI was the standout business, with revenue surging 78% to $7.3 billion, representing Intel’s strongest data center revenue growth in 15 years. Intel Foundry revenue also increased 58% to $6.7 billion. However, Client Computing and Physical AI revenue declined 5% to $8.1 billion, highlighting weakness in the PC market.
The main concern was Intel’s fourth-quarter outlook. The company expects revenue of $15.0 billion to $16.0 billion, implying a sequential decline from Q3’s $16.5 billion. More importantly, non-GAAP gross margin is expected to fall sharply to 38.0% from 44.1% in Q3, while adjusted EPS is projected at just $0.25 compared with $0.52 in the third quarter.
Management also warned that the PC slowdown is expected to continue through at least the first half of next year. At the same time, Intel plans to increase investments in capacity and working capital to address what it described as extraordinary demand for Xeon processors.
The 28% selloff therefore appears to reflect a substantial reset in near-term expectations. Despite strong Q3 revenue growth and accelerating data center demand, investors reacted negatively to the projected sequential revenue decline, roughly six-percentage-point contraction in adjusted gross margin, weaker Q4 earnings and prolonged PC-market headwinds.
