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INTC stock plunged more than 20% after Intel reported better-than-expected third-quarter earnings but delivered a disappointing fourth-quarter outlook. The sharp sell-off came as investors focused on weakening PC demand, production challenges, and a revenue forecast that fell well below Wall Street expectations.
INTC Stock Drops After Critical Q4 Forecast
Intel projected fourth-quarter revenue between $15 billion and $16 billion, compared with analysts’ expectations of approximately $17 billion. The company said the shortfall was primarily linked to a larger-than-anticipated decline in PC revenue.
The PC market is facing several pressures at once. Comparisons with the previous year are challenging because Microsoft’s decision to end support for Windows 10 encouraged businesses to upgrade to Windows 11 systems. That upgrade cycle boosted demand last year, making current results appear weaker by comparison.
At the same time, rising computer prices are causing consumers and businesses to delay purchases. Intel also said a deadly explosion at one of its plants in Israel, unrelated to the ongoing war, would limit its ability to meet demand. The incident is expected to account for roughly $300 million of the fourth-quarter revenue shortfall.
Intel Beats Q3 Earnings Expectations
Despite the weak outlook, Intel’s third-quarter results showed several areas of strength. Adjusted earnings per share came in at $0.52, exceeding the analyst estimate of $0.41. Revenue reached $16.5 billion, matching expectations and increasing 21% from the same period a year earlier.
- Adjusted earnings per share: $0.52 versus $0.41 expected
- Third-quarter revenue: $16.5 billion
- Intel Products revenue: $15.4 billion
- PC chip sales: $8.1 billion versus $8.8 billion expected
- Data center sales: more than $7.3 billion
- Foundry revenue: $6.7 billion, up 58% year over year
Intel’s product segment, which includes PC and data center processors, generated $15.4 billion, slightly below the $15.5 billion forecast. PC chip sales were the main weakness, falling short of the projected $8.8 billion.
AI Demand Boosts Intel’s Data Center Business
Intel’s data center operations helped offset some of the pressure in its consumer business. Revenue topped $7.3 billion, ahead of the $6.6 billion analysts had expected.
The company is benefiting from rising demand for central processing units used in artificial intelligence infrastructure. As more AI agents and applications come online, companies are expanding data center capacity, supporting demand for Intel’s processors.
However, investors remain cautious. Intel faces intense competition in data center chips, while the company’s ability to turn AI-related demand into sustained growth remains a key test for its recovery strategy.
Intel Foundry Shows Powerful Growth
Intel’s manufacturing division, known as Intel Foundry, produced one of the quarter’s strongest performances. Revenue reached $6.7 billion, beating Wall Street’s $6.1 billion estimate and climbing 58% year over year.
The foundry business is reportedly attracting major customers. The Information reported that Google placed an order for 3 million custom Tensor Processing Units, while Nvidia is reportedly discussing potential chip manufacturing arrangements with Intel.
Reuters also reported that Intel is in talks with SK Hynix over a possible agreement that could allow the memory chipmaker to lease space at Intel’s Ohio manufacturing facility. These discussions could strengthen Intel’s role as a domestic semiconductor manufacturer and help improve utilization of its expanding production network.
What Investors Are Watching Next
The immediate focus for investors will be whether Intel can stabilize PC sales while continuing to expand its data center and foundry businesses. The company’s latest report highlights a sharp divide: traditional PC demand is weakening, but AI infrastructure and contract manufacturing are showing momentum.
For now, the disappointing outlook has overshadowed the quarterly earnings beat. The dramatic reaction in INTC stock suggests that investors are demanding clearer evidence that Intel’s transformation can deliver consistent growth, stronger margins, and reliable production capacity.
Frequently Asked Questions About INTC Stock
Why did INTC stock fall so sharply?
INTC stock fell more than 20% because Intel’s fourth-quarter revenue forecast of $15 billion to $16 billion was below analysts’ expectations of about $17 billion. Weak PC sales and a plant explosion also affected the outlook.
Did Intel beat third-quarter earnings estimates?
Yes. Intel reported adjusted earnings of $0.52 per share, above the expected $0.41. Revenue reached $16.5 billion, matching estimates and rising 21% year over year.
How is AI affecting Intel’s business?
AI is increasing demand for data center CPUs, helping Intel’s data center business exceed expectations. The company’s foundry division is also pursuing new opportunities with major technology companies.
What happened at Intel’s plant in Israel?
A deadly explosion occurred at an Intel facility in Israel. The company said the incident was unrelated to the war and could reduce fourth-quarter revenue by approximately $300 million.
What is Intel Foundry?
Intel Foundry is the company’s chip manufacturing business. It produces semiconductors for Intel and potentially for outside customers, including technology companies seeking additional production capacity.
