Intel Q3 Earnings: Data Center Up 78%, Weak Outlook Sinks Stock

Hakkı ALKAN

October 29, 2026

Intel Q3 earnings beat expectations on Thursday, October 29, 2026: the chipmaker reported revenue of $16.5 billion, up 21% from a year earlier, as data center and AI sales jumped 78%. But Intel guided fourth-quarter revenue to just $15 billion to $16 billion, well below Wall Street estimates, and its shares fell more than 16% in after-hours trading, according to CNBC.

Intel Q3 Earnings at a Glance

According to Intel’s official results release, the third quarter of 2026 looked like this:

• Revenue: $16.5 billion, up 21% from $13.7 billion a year ago.
• Data Center and AI (DCAI): $7.3 billion, up 78%, which CFO David Zinsner called the strongest data center growth in 15 years.
• Client Computing and Physical AI (CCPG): $8.1 billion, down 5%.
• Intel Foundry: $6.7 billion, up 58%.
• Gross margin: 43.0% GAAP and 44.1% non-GAAP.
• Earnings per share: $0.60 GAAP and $0.52 non-GAAP, versus $0.23 adjusted a year earlier.
• Operating cash flow: $5.1 billion.

Why the Stock Fell Despite a Beat

The problem is the outlook. Intel expects Q4 revenue of $15 billion to $16 billion and adjusted EPS of $0.25. Analysts polled by LSEG were looking for $17.1 billion in revenue and $0.43 per share, CNBC reported. Non-GAAP gross margin is also expected to drop to 38%.

“We see the PC slowdown continuing at least through the first half of next year,” Zinsner said in the release. PC makers are being squeezed by soaring memory and component costs, the same shortage that pushed Samsung to record revenue and lifted SK Hynix’s Q3 results. Higher RAM prices make laptops and desktops more expensive, which weighs on demand for Intel’s client chips.

CNBC also reported that the forecast reflects an explosion earlier this month at an Intel fab in Israel, which Zinsner told Reuters will cost about $600 million in lost revenue over two quarters.

Xeon Demand and the Agentic AI Bet

CEO Lip-Bu Tan said demand for Intel’s CPUs remains robust and that the “immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family.” Agentic AI applications lean on CPUs to orchestrate tasks in the cloud, which has made server processors a growth story again alongside Nvidia and AMD GPUs.

During the quarter, Intel announced a multiyear deal with Oracle to expand Xeon-based computing on Oracle Cloud Infrastructure, including future Diamond Rapids chips. It also completed a $23 billion equity offering, released its Intel 14A 0.9 process design kit and announced plans to acquire quantum software company Classiq.

What It Means

For investors, Intel’s turnaround is now split in two: data center and foundry revenue are growing fast, while the PC business that still brings in the most money is shrinking. Intel stock was up about 150% this year before October, according to CNBC, so expectations were high. Big Tech results this week tell a similar story of booming AI infrastructure spending, as seen in Amazon’s Q3 earnings. AMD reports next week and Nvidia in mid-November.