Key Notes
- Intel shares fell more than 20% in early after-hours trading before paring losses, as its weak Q4 outlook outweighed better-than-expected Q3 earnings.
- Q3 revenue rose 21% to $16.5 billion and adjusted EPS reached $0.52, above the $0.41 analyst forecast cited by Yahoo Finance.
- Intel forecasts Q4 revenue of $15 billion–$16 billion and adjusted EPS of $0.25, with PC weakness expected to persist at least through the first half of 2027.
Intel Corp. (NASDAQ: INTC) shares plunged more than 20% in early after-hours trading Thursday after a disappointing fourth-quarter forecast overshadowed stronger-than-expected Q3 adjusted earnings. Weak PC demand and a projected decline in profit margins put renewed pressure on the chipmaker’s turnaround.
The distinction is important: Intel beat third-quarter adjusted earnings estimates, rather than missing them. The disappointment centered on what comes next, with management’s revenue range for the holiday quarter falling below Wall Street’s expectations even at its upper end.
Yahoo Finance reported the initial decline of more than 20%. Its quote subsequently showed INTC at $76.10, down 17.35% from the $92.07 regular-session close, at 5:02 p.m. Eastern. These are extended-hours moves, rather than the closing result of Friday’s session.
Q3 Earnings Beat Expectations
Intel’s October 29 results showed revenue of $16.5 billion, up 21% year over year, and adjusted diluted earnings of $0.52 per share. Yahoo Finance cited an analyst forecast of $0.41, with revenue broadly matching expectations.
GAAP diluted earnings were $0.60 per share, compared with $0.90 a year earlier. Adjusted EPS rose from $0.23, reflecting the different treatment of items excluded from the company’s non-GAAP measure. The adjusted result is the appropriate comparison with the adjusted analyst estimate.
Profitability also improved in the reported quarter. Adjusted gross margin reached 44.1%, up from 40% a year earlier, while adjusted operating margin rose to 19.6% from 11.2%. Those gains helped explain the earnings beat, but the outlook pointed to a reversal in gross-margin momentum.
Q4 Guidance Drives the Selloff
For the fourth quarter, Intel forecasts revenue of $15 billion–$16 billion and adjusted EPS of $0.25. Investing.com’s report cited consensus estimates of $17.08 billion in revenue and $0.44 in adjusted EPS.
The revenue range’s $15.5 billion midpoint is roughly 9% below that sales estimate. Even the $16 billion upper limit falls short. Intel’s GAAP EPS forecast is $0.10, a separate measure that should not be compared directly with the adjusted consensus.
The company expects an adjusted gross margin of 38%, down 6.1 percentage points from Q3. A lower margin means less profit remains from each dollar of sales before operating expenses, making it harder for revenue growth elsewhere in the business to translate into stronger earnings.
Chief Financial Officer David Zinsner said Intel expects the PC slowdown to continue at least through the first half of 2027. That is management’s forecast, rather than a confirmed outcome for next year’s market.
Server Growth Contrasts With PC Weakness
The segment results showed how uneven Intel’s recovery remains. Revenue in the Client Computing and Physical AI Group fell 5% year over year to $8.1 billion. Data Center and AI revenue, by contrast, rose 78% to $7.3 billion.
Chief Executive Lip-Bu Tan said an immediate priority is increasing supply to meet demand for Xeon processors. The figures show that strong server demand can coexist with weaker personal-computer sales; they do not support a broad claim that demand for all Intel products has collapsed.
For investors, the issue is whether growth in the server business can offset pressure in Intel’s larger client division while the company expands manufacturing capacity. Sales growth, available supply and profitability remain separate tests of that recovery.
Foundry Progress Still Carries Costs
Intel Foundry reported $6.7 billion in segment revenue, up 58% year over year, alongside an operating loss of approximately $1.85 billion. The revenue includes internal transactions, so it cannot be treated as entirely external customer sales or simply added to Intel Products revenue.
The company generated $5.1 billion in operating cash flow during Q3 and completed a $23 billion public equity offering. Operating cash flow measures cash generated by the business, while the share sale is financing that increases the equity capital available to support investment.
Intel’s capital needs form part of a broader industry challenge. As we previously reported, its chief executive has warned that access to funding and the returns on AI infrastructure can become constraints even when demand for computing remains strong.
What INTC Investors Will Watch Next
The immediate benchmarks are Intel’s fourth-quarter revenue range, projected gross margin and ability to expand server supply. Evidence of improving PC demand would also matter, particularly after management extended its caution into the first half of next year.
The reaction joins a difficult earnings period for technology shares. ServiceNow’s stock fell 27% in its worst session on record after an adjusted earnings miss, as we reported. Intel’s case differs: it delivered a Q3 profit beat, but investors were confronted with a weaker forecast for the following quarter.
Thursday’s extended-hours selloff therefore reflects a reassessment of near-term expectations. The next results will test whether server growth and manufacturing improvements can support earnings as the PC business works through its slowdown.
