Intel Says Memory Costs Are Cutting PC Sales; Stock Falls 23%

Intel reported third-quarter results after Thursday's close. Revenue rose 21% year over year to $16.5B, and adjusted earnings per share of $0.52 beat the $0.40 estimate.

The stock had closed the day at $92.07. It lost 23% in after-hours trading, and the damage came not from the past quarter but from the company's fourth-quarter guidance.

Revenue Met Estimates, Guidance Did Not

Intel guided fourth-quarter revenue to $15B-$16B. The midpoint sits 9.2% below the $17.07B LSEG consensus and $1B below the third quarter.

The EPS guidance is 42% below consensus. These figures use the same definitions as the site's Intel earnings analysis.

The PC Market Shrank 22%

The weakness sits in the PC business. The client segment, which sells PC processors, shrank 5% in the third quarter to $8.1B. According to reports from the call, Intel expects it to fall more than 20% sequentially in the fourth quarter.

Gartner's preliminary data show global PC shipments fell 22.4% in the third quarter to 55.4 million units. HP's shipments dropped 30.9% and Dell's 25.4%; Gartner tied the decline to memory and storage costs.

CFO David Zinsner said the PC slowdown would last "at least through the first half of next year."

Intel's problem is not demand for processors. It is the memory bill standing in front of that demand.

How the Memory Bill Cuts PC Demand

According to Gartner, DRAM costs in the second quarter were five times their level a year earlier. That raises the price of a PC and lowers the number sold.

Intel's own numbers point the same way. A 20% drop in client revenue removes about $1.6B; for total revenue to fall only $1B, the data center has to offset part of it.

Adjusted gross margin falls from 44.1% to 38%. On $15.5B of revenue, a 6.1-point loss means roughly $950M less gross profit; reports from the call attribute 2 points to an accident at Intel's Israel fab.

Memory Stocks Fell in Asia Too

AI and memory stocks sold off in Asia on Friday. News agencies tied the selling to concern over AI spending returns after results from Intel, Amazon and Alphabet.

The Kospi fell more than 5% intraday before trimming its loss. Nasdaq 100 futures dropped more than 2% in Asian trading, and the Bank of Japan held its rate at 1.25%. Kioxia reports quarterly results the same day at 6:45 p.m. Tokyo time.

The Data Center Tells a Different Story

In the same report, data center revenue rose 78% to $7.3B. CEO Lip-Bu Tan said the constraint there is supply, not demand; Intel cannot build enough to meet "extraordinary demand for our Xeon family."

According to reports, a shortage of advanced packaging substrates is limiting server processor output. Through Thursday's close the stock had gained roughly 150% this year; the after-hours drop gave back part of that gain.

What It Means for Investors

• The market had already priced data center growth; what it had not priced was the PC contraction stretching into 2027.
• Expensive memory is revenue for Micron and SK Hynix, but cost and lost units for Dell, HP and Intel's PC business.
• The threshold to watch is whether client revenue in Intel's January report falls below $6.5B.
• The risk to this thesis is easing memory prices, which could bring PC demand back sooner than Intel expects.

Our guide How to Read Earnings Day explains how prices react to results.

Sources: Results and guidance come from Intel's October 29, 2026 release filed with the SEC; consensus is from LSEG. The client contraction, the Israel accident's margin impact and Asian closes come from secondary reports (TradingKey, Investing.com). The after-hours decline uses the same measure as the site's earnings analysis, and PC shipments are Gartner's October 12 preliminary data.