Key takeaways
- Intel reported Q3 revenue of $16.5B, up 21%, with Data Center and AI up 78% to $7.3B.
- It guides Q4 revenue of $15.0B to $16.0B and a non-GAAP gross margin of 38.0%.
- Shares fell more than 16% in after-hours trading on October 29, according to CNBC.
Intel reported third-quarter revenue of $16.5 billion on October 29, up 21% from a year ago, and then told investors to expect less next quarter. Intel earnings for Q3 2026 beat on the quarter, but the fourth-quarter outlook of $15.0 billion to $16.0 billion is what sent the stock down. According to CNBC, as summarized by Techmeme, shares fell more than 16% in after-hours trading, and other outlets reported larger drops.
What Intel reported
The figures below come from Intel's earnings release for the quarter ended September 26:
| Q3 2026 | |
|---|---|
| Revenue | $16.5B, up 21% |
| Gross margin | 43.0% GAAP, 44.1% non-GAAP |
| Earnings per share | $0.60 GAAP, $0.52 non-GAAP |
| Operating income | $2.52B GAAP, $3.23B non-GAAP |
| Operating cash flow | $5.1B |
Intel finished the quarter with $21.8 billion in cash and cash equivalents and $32.2 billion in short-term investments.
Data center sales jumped 78%
The AI-related growth is in servers. Data Center and AI revenue rose 78% to $7.3 billion, driven by demand for Xeon server processors. Intel Foundry, its chip manufacturing arm, reported $6.7 billion, up 58%. The PC business, now called the Client Computing and Physical AI Group, fell 5% to $8.1 billion.
CEO Lip-Bu Tan said Intel's priority is to "unlock additional supply to meet extraordinary demand for our Xeon family." Intel also listed industry-wide substrate and memory shortages among its risks.
Why the stock fell
For the fourth quarter Intel guides revenue of $15.0 billion to $16.0 billion, below the $16.5 billion it just reported. It expects a non-GAAP gross margin of 38.0%, down from 44.1%, and non-GAAP earnings of $0.25 per share. Intel's own release does not give a reason for the drop in margin. Press reports on the earnings call point to weak PC demand and a temporary factory shutdown in Israel. We have not confirmed those details against the call itself.
Reports of the after-hours drop range from more than 16% to more than 22%. These are moves in thin after-hours trading, not a closing price. The regular-session close on October 30 will show where the stock settles.
What to watch
Intel's 14A manufacturing process is the long-term bet. The company said it released the 14A 0.9 process design kit in October and announced a High-NA EUV collaboration with ASML. The nearer test is whether Intel can add Xeon supply fast enough to turn data center demand into the revenue its fourth-quarter guidance leaves out.
