Intel delivered a solid quarter on Thursday, but its guidance underscored how heavily it still depends on the struggling PC market, sending shares sharply lower after hours. We're not joining the sell-off just yet. Revenue in the third quarter increased 21% year over year to $16.513 billion, edging out the LSEG-compiled consensus estimate of $16.496 billion. Non-GAAP earnings per share (EPS) more than doubled to 52 cents, beating the LSEG estimate of 40 cents. INTC YTD mountain Intel 1-year return Bottom line Despite data center demand and improvements at its foundry still pointing to a solid long-term outlook, analysts will need to revise estimates downward for several quarters, as weakness in the consumer electronics market will persist well into 2027. Why not bail on the stock? This is the reset. Further downside is certainly possible, but selling now won't erase the losses we've taken. Looking ahead to next year, we see the data center business continuing to grow as agentic AI workloads drive demand for CPUs, foundry operations continue to improve, and the PC market bottoms out. As a result,…
Intel plunges on a major guidance miss. What went wrong — and how to proceed
In short
Intel delivered solid third-quarter results driven by strong Data Center and AI growth, with overall revenue climbing 21% year over year to $16.513 billion. However, client PC sales dropped 5%, leaving a core business that accounts for over half of product group revenue severely vulnerable to rising component costs. Management must now resolve critical packaging shortages alongside a $300 million factory disruption in Israel to fulfill server processor shipments.
Key points
- Heavy industry demand for data center infrastructure is directly squeezing the supply and…: Heavy industry demand for data center infrastructure is directly squeezing the supply and pricing of components essential for consumer computers.
- Resolving advanced organic substrate shortages and factory efficiency issues remains crit…: Resolving advanced organic substrate shortages and factory efficiency issues remains critical for meeting long-term enterprise computing needs.
- Persistent weakness in the personal computer market is expected to challenge overall corp…: Persistent weakness in the personal computer market is expected to challenge overall corporate profitability through 2027.