Intel Beats Third Quarter Profit Forecasts, but Weak Fourth Quarter Guidance and PC Warning Cloud the Outlook

Update: Shares plunge about 18 percent after hours as Intel puts a $600 million cost on the Kiryat Gat factory explosion

Updated 22:35 UTC, Oct. 29, 2026. Intel shares plunged about 18 percent in after hours trading on Thursday after the company disclosed on its earnings call that an October explosion at its Kiryat Gat factory in Israel will cost it roughly $600 million in lost revenue over two quarters, Reuters reported. The factory, or fab, has been shut down for about two weeks. The October explosion at Kiryat Gat killed two people and seriously injured one, according to local media reports cited by Reuters. Finance chief David Zinsner told Reuters in an interview that the fourth quarter revenue outlook would be reduced by roughly $300 million and gross margins by about 200 basis points, with a similar revenue impact expected in the first quarter, and that Intel planned to start ramping production at the facility back up by the end of this week. The Kiryat Gat fab largely produces data center chips using the company's 10 nanometer manufacturing process, and Intel is still determining which wafers are salvageable for use and sale after the blast. "We are still assessing all of the wafers to see which ones are usable and which ones are not, so we will have to see whether there is an impact that stretches beyond that," Zinsner said, according to Reuters.

The fall spread across chip stocks in post close trading. AMD dropped 4 percent and Broadcom fell 2 percent, and the Direxion Daily Semiconductor Bull ETF, which offers three times the daily performance of the semiconductor index, was off 9 percent, Reuters reported. The semiconductor index had already fallen 1.4 percent in the regular session. "Overall semis weakness after hours is primarily a function of INTC guide and negative sentiment spillover," said Michael James, equity sales trader at Rosenblatt Securities, according to Reuters. "The revenues missed due to lower PC demand and forward guidance also disappointed. As Google learned today, earnings matter," said Kim Caughey Forrest, founder and chief investment officer at Bokeh Capital Partners LLC, according to Reuters. Alphabet, the Google parent, dropped 13 percent on Thursday.

Intel beat third quarter profit forecasts on Thursday, October 29, 2026, as data center sales posted their strongest growth in 15 years, but the chipmaker gave a fourth quarter outlook well below Wall Street expectations and warned that the personal computer slowdown will run into next year. The two halves of the report point in opposite directions, and the guidance is the part investors have to weigh.

Third quarter revenue was $16.5 billion, up 21 percent year over year from $13.7 billion in third quarter 2025. Earnings per share attributable to Intel were $0.60 on a GAAP basis and $0.52 on a non-GAAP basis. Adjusted earnings of $0.52 beat the $0.41 that analysts expected according to FactSet, as reported by Barron's and investinglive. Seeking Alpha reported that non-GAAP earnings of $0.52 beat estimates by $0.12, on revenue of $16.51 billion.

Margins improved with the revenue. GAAP gross margin was 43.0 percent, up 4.8 points from 38.2 percent, and non-GAAP gross margin was 44.1 percent, up 4.1 points from 40.0 percent. investinglive reported that adjusted operating margin of 19.6 percent also beat forecasts.

Data center and foundry beat, PCs miss

The mix explains the quarter. Data Center and AI revenue of about $7.3 billion and Foundry revenue of about $6.7 billion both beat estimates, according to investinglive and MarketWatch. Client Computing revenue of about $8.1 billion missed, falling about $700 million short of expectations.

Chief financial officer David Zinsner said revenue, gross margin and earnings per share all exceeded the company's own guidance, including the strongest data center revenue growth in 15 years. Chief executive Lip-Bu Tan said the results show improving execution, meaningful progress expanding supply and continued advancement of the company's process technology, in the official release.

Guidance falls short, and the PC market stays weak

For the fourth quarter of 2026, Intel guided revenue of $15.0 billion to $16.0 billion, with GAAP earnings per share of $0.10 and non-GAAP earnings per share of $0.25, in its official release.

That guide sits well below what Wall Street had built in. Barron's reported that analysts had anticipated adjusted earnings of 45 cents a share and $17.3 billion in revenue. investinglive reported a consensus of $0.43 for adjusted earnings and about $17 billion for revenue, with expected adjusted gross margin of 38 percent against a 42.8 percent forecast.

The PC outlook is the other drag. Zinsner said the PC slowdown is expected to continue at least through the first half of next year, and investinglive reported that Intel expects the PC market to decline into the second half of 2027. With client computing already missing in the third quarter, that warning extends the weak spot in the business well beyond one quarter.

The result, then, is a company executing better in the parts of the market that are growing, data centers, AI and foundry work, while the older PC business shrinks and pulls the near term outlook down. The third quarter numbers cleared the bar Intel and analysts had set. The fourth quarter guide did not.