Intel Shares Drop as Weak Q4 Outlook Clouds Strong Q3

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: October 30, 2026

Key Moments

Intel (NASDAQ: INTC) shares dropped 25% in premarket trading after a weak fourth-quarter outlook overshadowed a third-quarter earnings beat.
Third-quarter adjusted earnings reached $0.52 per share on $16.5 billion in revenue, topping analyst estimates of $0.40 per share and $16.48 billion in revenue.
Intel projected fourth-quarter revenue of $15 billion to $16 billion and adjusted EPS of $0.25, both below Wall Street expectations.

Market Reaction to Guidance

Investing.com – Intel (NASDAQ: INTC) saw its shares sink 25% in premarket trading after the company issued fourth-quarter earnings and revenue guidance that came in well under Wall Street forecasts, overshadowing its stronger-than-anticipated third-quarter performance and robust demand for data-center products.

Third-Quarter Results Outperform Expectations

For the third quarter, Intel reported adjusted earnings of $0.52 per share, ahead of analyst projections of $0.40 per share. Revenue increased 21% year over year to $16.5 billion, edging past consensus expectations of $16.48 billion.

Metric	Reported Q3	Consensus
Adjusted EPS	$0.52	$0.40
Revenue	$16.5 billion	$16.48 billion

Intel noted that solid demand for data-center processors helped drive overall growth, even as parts of its business contended with softer conditions.

Weak Q4 Forecast Weighs on Sentiment

The company’s outlook for the fourth quarter presented a more cautious picture. Intel guided revenue to a range of $15 billion to $16 billion, below analyst expectations of $17.08 billion. At the midpoint, the forecast implies an approximate 9% shortfall versus consensus. Adjusted earnings are projected to be $0.25 per share, compared with market expectations of $0.44 per share.

Management indicated that the guidance reflects mixed dynamics across Intel’s portfolio, with server CPU strength only partially offsetting ongoing headwinds in the PC segment.

PC and Data Center Businesses Diverge

The company highlighted sharp contrasts within its operating segments. Revenue in Intel’s Client Computing and Physical AI Group declined 5% year over year to $8.1 billion in the third quarter, aligning with a broader slowdown in the PC industry.

In stark contrast, the Data Center and AI segment posted a 78% year-over-year revenue surge to $7.3 billion. Chief Financial Officer David Zinsner described this as the strongest data-center revenue growth in 15 years.

Segment	Q3 Revenue	Year-over-Year Change
Client Computing and Physical AI Group	$8.1 billion	-5%
Data Center and AI	$7.3 billion	+78%

“Despite near-term headwinds across the PC industry, demand for our CPUs remains robust,” Chief Executive Lip-Bu Tan said, adding that the results reflected improving execution, expanded supply and progress in process technology.

Zinsner said Intel expects PC market weakness to persist through at least the first half of next year.

Margins, Foundry Operations, and Analyst View

Profitability trends were another source of concern for investors. Intel’s adjusted gross margin improved to 44.1% in the third quarter from 40% in the same period a year earlier. However, the company anticipates that adjusted gross margin will retreat to 38% in the fourth quarter.

On the foundry side, Intel Foundry revenue climbed 58% year over year to $6.7 billion. The company generated $5.1 billion in operating cash flow during the quarter. Market participants are continuing to evaluate whether Intel’s manufacturing business can secure sufficient external customer demand to underpin its long-term capital commitments.

“Client easy comps will not materialize until 2H27, while we continue to model share loss in both segments in 2027,” Baird analysts said in a client note.

Focus on Turnaround Signals

Investors are looking for further clarity on Intel’s turnaround efforts. Updates on foundry customer commitments, available manufacturing capacity, and the roadmap for upcoming process technologies are expected to be key areas of interest when management discusses the results on its earnings call.