Intel shares slide as weak forecast offsets third-quarter earnings beat

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Intel shares slide on forecast

Highlights

Intel reports Q3 adjusted EPS of 52 cents on $16.51 billion revenue, beating estimates, but guides Q4 EPS of 25 cents on $15–16 billion revenue, missing forecasts.
Data center and AI revenue jumps 78% to $7.3 billion while client computing and physical AI revenue falls 5% to $8.1 billion, highlighting uneven demand.
Intel enters high-volume production of 18A chip at Arizona fab, but foundry business remains under scrutiny as large customers consider alternatives to TSMC.

Quarterly results and softer fourth-quarter outlook

As reported by CNBC, citing Intel in a press release, the company posts adjusted third-quarter earnings per share of 52 cents on revenue of $16.51 billion, ahead of analyst estimates compiled by LSEG for 40 cents and $16.5 billion. Revenue rises 21% from $13.7 billion a year earlier, but the market reaction turns sharply negative after Intel projects a weaker current quarter.

For the fourth quarter, Intel says it expects adjusted earnings per share of 25 cents on revenue of $15 billion to $16 billion. That compares with analyst expectations for revenue of $17.1 billion and earnings per share of 43 cents, according to LSEG.

Within the quarter, revenue from Intel's client computing and physical AI group falls 5% from a year earlier to $8.1 billion, missing estimates. By contrast, data center and AI revenue jumps 78% to $7.3 billion, highlighting the uneven demand picture across the company.

Chief Financial Officer David Zinsner says the PC slowdown is continuing at least through the first half of next year, while Intel remains focused on disciplined investment in capacity and working capital. Chief Executive Lip-Bu Tan says the company continues to see robust long-term demand for CPUs and its broader computing platforms despite near-term pressure on the PC industry.

AI momentum faces pressure from PC and foundry challenges

Intel has been one of Wall Street's stronger semiconductor performers this year, with the stock up about 150% before the latest move, although it is also down roughly 23% in October as investors question the scale of the artificial intelligence buildout. The company has benefited from interest in agentic AI, where CPUs play a larger role in coordinating tasks and cloud-based data flows.

That strength is being offset by a weaker personal computer market. Counterpoint Research says global PC shipments decline 4% in the second quarter from a year earlier as higher costs for memory and other components weigh on demand.

Intel's foundry business also remains under scrutiny as it works to build an alternative to Taiwan Semiconductor Manufacturing Co. The company says it is now in high-volume production of its most advanced 18A chip at its new Arizona fabrication plant, and analysts say a major fabless customer could eventually adopt Intel's next-generation 14A process.

TechInsights analyst Dan Hutcheson says large chip designers are testing Intel's manufacturing capabilities as they look for a second source alongside TSMC and more leverage on pricing. That leaves Intel balancing longer-term strategic opportunities in U.S. chip production and AI infrastructure against near-term pressure in its core PC-related operations.

In our earlier article on the U.S. AI data-center buildout, we examined how rising financing costs, construction delays, and power-grid constraints are making a large share of planned projects look less realistic. We also noted that weakening investor confidence and cost overruns at infrastructure firms could slow the pace at which new computing capacity comes online—an important backdrop for chipmakers whose AI growth depends on sustained data-center expansion.

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