Overview
Since the Report − 21.2%
Revenue grew 20.9% year over year, EPS beat the estimate by 30.0%; the stock fell 21.5% in its first reaction.
- RevenueQ3
- $16.51B
- ▲ 20.9% YoY · in Line
- EPSAdjusted
- $0.52
- Estimate $0.40 · 30% Beat
Verdict
HOLDIntel's third-quarter revenue of $16.51 billion was in line with expectations, while adjusted EPS beat the estimate by 30%. The stock fell 21.5% after hours because fourth-quarter revenue guidance came in 9% below expectations. The measure to watch now is how much the PC slowdown overshadows data center growth.
Close on Report DayOct 29
$92.07▼ 21.5%Report-Day Move
- Market Cap(Today)
- ≈ $383 B
- 1Y Return(At Report)
- + 123%
- P/E(At Today's Price · $1.38 · Trailing 12M)
- 52.6
- Net Margin(Trailing 12M)
- − 19.8%
Earnings Summary
In 30 Seconds- Revenue of $16.51 billion was in line with expectations, and adjusted EPS of $0.52 beat the estimate by 30%.
- Data center revenue grew 78% year over year, but the PC slowdown pulled fourth-quarter guidance 9% below expectations.
- The stock fell 21.5% after hours on weak guidance and an expected drop in gross margin to 38%.
The Numbers
Data Center and AI
$7.32B
▲ 78% YoY · Fastest in 15 Years
Adjusted Gross Margin
44.1%
Year Ago 40.0% · ▲ 4.1 Points
Q4 Revenue Guidance
$15.0–16.0B
Estimate 17.07 · 9.2% Below
Stock Reaction
▼ 21.5%
After Hours, 6:01 P.m. ET · Not Settled
Quarterly Revenue ($ Billion)
13.65
Q3 25 · $13.7 B
13.67
Q4 25 · $13.7 B · QoQ + 0.2%
13.58
Q1 26 · $13.6 B · QoQ − 0.7%
16.13
Q2 26 · $16.1 B · QoQ + 18.8%
16.51
Q3 26 · $16.5 B · QoQ + 2.4% · YoY + 20.9%
15.0–16.0
Q4 26E · 15.0–16.0 · QoQ − 6.1% · YoY + 13.4%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Q4 Revenue15 – 16 billion15 billion16 billion15 – 16 billion
Midpoint 15.5 · Market Expectation 17.07 · Fab Impact ~0.39.2% Below Estimate ▼
- Q4 Adjusted EPS0.25 $
GAAP Guidance 0.10 · Market Expectation 0.4341.9% Below Estimate ▼
- Q4 Adjusted Gross Margin38%
Q3 Actual 44.1%. Earnings-call Details Will Be Added Tonight.6.1-Point Contraction ▼
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±83% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Client Computing$8.10 BShare 35.5%▼ 5.0% YoY
- Data Center and AI$7.32 BShare 32.1%▲ 78.0% YoY
- Intel Foundry$6.70 BShare 29.4%▲ 58.0% YoY
Mostly intersegment sales
- All Other$692 MShare 3.0%▼ 30.0% YoY
Mobileye and IMS
Key Metrics
Operating Cash Flow
$5.08 B
▲ 99.6% YoYPress Release
Adjusted Free Cash Flow
$1.64 B
▲ 82.9% YoYPress Release
Gross Capital Spending
$4.22 B
Press Release
GAAP Gross Margin
43.0%
Press Release
Adjusted Operating Margin
19.6%
Press Release
Shares are computed over the segment total: $22.8 B. The segment total differs from consolidated revenue ($16.5 B); the company's eliminations and other lines are not in this table. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Our Q3 results demonstrate improving execution, meaningful progress expanding supply and continued advancement of our process technology. Despite near-term headwinds across the PC industry, demand for our CPUs remains robust, reinforcing our confidence in the long-term growth opportunities for our business. Our immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family, while strengthening our product portfolio and roadmap.”
- Xeon Demand Exceeds Supply
- Near-term PC Headwinds
- Process Technology Progress
Summary and Review
Summary
Intel's revenue rose 20.9% year over year to $16.51 billion. The market expected $16.50 billion, so the 0.1% gap is in line. Adjusted EPS came in at $0.52, beating the $0.40 estimate by 30%. Fourth-quarter revenue guidance, however, is $15.0-16.0 billion. The midpoint is 9.2% below the $17.07 billion estimate. The earnings gate is open, the revenue gate is in line, and the guidance gate is closed.
The stock closed October 29 at $92.07, then fell 21.5% after hours as of 6:01 p.m. ET, to $72.26. The price has not settled. The market did not read this report as an earnings story; it read it as a guidance story. Fourth-quarter adjusted EPS guidance is $0.25. That is 42% below the $0.43 estimate. Gross margin guidance of 38% is also 6.1 points below the third quarter.
The score is 51 and the verdict is hold; it rates the quarter, not the stock. Data center revenue grew 78% year over year and adjusted gross margin widened 4.1 points. But on the decision table the guidance gate is closed, which places the score in the 50-59 band. The sharp drop in guidance keeps it near the bottom of that band. The stock had gained 122.7% over the past year, so expectations fell from a high base.
Full Review
Data center posts its fastest growth in 15 years.
Data Center and AI revenue rose 78% year over year to $7.32 billion. In the release, CFO David Zinsner called it the strongest data center growth in 15 years. The segment's share of total revenue rose from 30.2% a year ago to 44.3%. CEO Lip-Bu Tan wrote that demand for the Xeon family is extraordinary. In his view, the company's immediate priority is to unlock more supply. That sentence says production, not demand, is the constraint. As supply grows, the segment's growth rate will track it. Intel Foundry revenue also rose 58% to $6.70 billion. Foundry's operating loss narrowed from $2.32 billion to $1.85 billion. In October the company released the 0.9 version of its 14A process design kit. That step is a prerequisite for winning external customers.
The PC business is slowing.
Client Computing revenue fell 5% year over year to $8.10 billion. The segment is still Intel's largest revenue line. The CFO expects the PC slowdown to last at least through the first half of next year. That is why fourth-quarter revenue guidance dropped to $15.0-16.0 billion. The $15.5 billion midpoint is 6.1% below the third quarter. The market expected $17.07 billion, a 9.2% gap. Adjusted EPS guidance is $0.25 against a $0.43 estimate. Part of the gap is one-off. According to CFO Zinsner, an October explosion at the Kiryat Gat fab in Israel cuts fourth-quarter revenue by about $300 million. That is roughly a fifth of the $1.57 billion gap to expectations. The same event takes about 2 points off gross margin. The fab was shut for about two weeks; Intel expects a similar revenue hit in the first quarter.
Margins widened, guidance narrows them.
Adjusted gross margin was 44.1%. It was 41.8% in the prior quarter and 40.0% a year ago. That is a 4.1-point annual expansion and a 2.3-point sequential gain. GAAP gross margin also rose from 38.2% to 43.0%. For the fourth quarter, the company guides adjusted gross margin to 38.0%. That implies a 6.1-point contraction from the third quarter. This quarter, GAAP EPS of $0.60 came in above the adjusted figure. The gap comes from a $1.0 billion gain on escrowed shares owed to the U.S. Department of Commerce. The adjusted definition excludes that gain. Adjusted net income rose 169% year over year to $2.76 billion. Adjusted operating margin was 19.6%. GAAP operating margin stood at 15.3%.
Cash flow and funding strengthened.
Operating cash flow was $5.08 billion, nearly double a year ago. Adjusted free cash flow rose from $896 million to $1.64 billion. Gross capital spending was $4.22 billion. The company completed its $23 billion equity offering. Year to date it has raised $22.6 billion in net proceeds from the offering. Over the same period it took on $13.0 billion of new term debt. These funds finance the plan to expand supply. Together the two items add up to $35.6 billion of outside funding. The CFO said Intel will keep making disciplined investments in capacity and working capital. The share count has reached 5.31 billion. The offering diluted existing holders and limits EPS growth. As a result, profit growth will look slower on a per-share basis.
Next quarter, watch one line.
This quarter's story is a two-speed company: data center is racing, PC is braking. Next quarter, watch one line: adjusted gross margin. If margin lands above the 38% guide, the cost of ramping supply is being managed better than expected. If it falls below 38%, data center growth is not enough to protect profitability. The second check is whether data center's share stays above 44%. For a general framework on reading earnings day, see our guide. What management says on the call about supply constraints, 18A output and PC demand will be added tonight. The fab impact will carry into the first quarter, so first-quarter guidance should be read with that item in mind.
Looking Ahead
Strengths and Risks
5 Strengths · 6 RisksStrengths
5- Data Center and AI revenue rose 78% year over year to $7.32 billion.
- Adjusted EPS of $0.52 beat the $0.40 estimate by 30%.
- Adjusted gross margin of 44.1% widened 4.1 points from a year ago.
- Intel Foundry's operating loss narrowed from $2.32 billion to $1.85 billion.
- Adjusted free cash flow rose from $896 million to $1.64 billion.
Risks
6- The midpoint of fourth-quarter revenue guidance is 9.2% below expectations.
- Fourth-quarter adjusted EPS guidance of $0.25 is 42% below the estimate.
- Gross margin guidance of 38.0% implies a 6.1-point contraction from the third quarter.
- The CFO expects the PC slowdown to last at least through the first half of next year.
- The $23 billion equity offering lifted the share count to 5.31 billion.
- The Kiryat Gat fab explosion takes about $300 million off fourth-quarter revenue and about 2 points off gross margin.
What to Watch
2- 18A-P process: due to ramp in the fourth quarter, according to the company presentation.
- Q4 2026 earnings (~late January 2027)Revenue guidance is $15.0-16.0 billion.
Upcoming Earnings
To Understand This