Intel's Data Center Revenue Jumps 78% To $7.3 Billion, But PC Chips Fall 5% And Guidance Dips
Third-quarter revenue rose 21%, while the company guided fourth-quarter adjusted earnings to about $0.25 per share, from $0.52.
Intel, the Santa Clara chipmaker, said third-quarter revenue rose 21% to $16.5 billion as data center chip sales climbed 78%, but it guided fourth-quarter adjusted earnings to about $0.25 per share, less than half the quarter's $0.52. CFO David Zinsner said the PC slowdown will last at least through the first half of next year.
Servers and foundry carry the quarter
Adjusted earnings were $0.52 per share, against $0.23 a year earlier, the company reported. Adjusted gross margin improved to 44.1% from 40.0%.
Data Center and AI revenue rose 78% to $7.3 billion, and Intel Foundry, which makes chips for outside customers, rose 58% to $6.7 billion. The PC chip unit, Client Computing and Physical AI, fell 5% to $8.1 billion.
On standard accounting, earnings per share fell 33% to $0.60 from $0.90. That comparison includes a $1.005 billion mark-to-market gain on escrowed shares this quarter, against a $1.687 billion loss a year ago, and a year-ago divestiture gain of $5.452 billion in the company's reconciliation. The company generated $5.1 billion in cash from operations.
"Revenue, gross margin and earnings per share exceeded guidance, including our strongest data center revenue growth in 15 years," Zinsner said.
A lower fourth-quarter outlook
Intel guided fourth-quarter revenue to $15.0 billion to $16.0 billion, below the third quarter's $16.5 billion. Adjusted gross margin is forecast at about 38.0%, and standard-accounting earnings at about $0.10 per share.
CEO Lip-Bu Tan said the priority is to "unlock additional supply to meet extraordinary demand for our Xeon family," its server processor line, even as PC demand softens. Zinsner said Intel will keep investing in capacity and working capital to raise supply.
Capital raised and spent
Intel completed a $23 billion public stock offering in the period. It ended the quarter with $21.8 billion in cash and equivalents and $32.2 billion in short-term investments, and with $46.3 billion in long-term debt.
According to a Globe and Mail report, Intel raised its 2026 capital spending forecast to $20 billion from $18 billion. The report also said an October explosion at a fab in Kiryat Gat, Israel, trimmed the fourth-quarter outlook by roughly $300 million, per Zinsner, who expects a similar hit in the first quarter.
Zinsner's guidance puts the PC slowdown through at least the first half of next year, while Intel works to add Xeon supply.
Sources
- 8-K Filing — INTEL CORP (INTC) — SEC EDGAR
- Exhibit q326earningsrelease.htm — INTEL CORP 8-K exhibit — SEC EDGAR
- Intel signals slower growth as PC market remains under pressure - The Globe and Mail — theglobeandmail.com
- Intel Q3 earnings on deck: What to expect — Yahoo Finance
- Intel Reports Third-Quarter 2026 Financial Results — businesswire.com
