US semiconductor company Intel (ISIN: US4581401001) has reported its financial results for the third quarter of 2026. While the past three months were operationally better than analysts had expected, the outlook for the current fourth quarter triggered heavy selling on the stock market. On trading Friday, October 30, 2026, the shares fell by as much as 29 percent in regular US trading, dropping from around 92 US dollars the previous day to about 65.76 US dollars.
Third quarter beats earnings expectations
In the three months through the end of September 2026, Intel generated revenue of 16.51 billion US dollars, an increase of 21 percent compared with the same period last year. Adjusted earnings per share (non-GAAP EPS) rose from 0.23 US dollars a year earlier to 0.52 US dollars, clearly exceeding both analysts' consensus forecasts of around 0.40 US dollars and the company's own forecast of 0.38 US dollars. The main driver of this development was the Data Center and AI (DCAI) segment, whose revenue climbed 78 percent to 7.32 billion US dollars, driven by strong demand for Xeon server processors.
Disappointing year-end quarter triggers share-price slide
The reason for the sharp pullback lies in the forecast for the fourth quarter of 2026. Management expects revenue between 15.0 and 16.0 billion US dollars (midpoint 15.5 billion US dollars), while the market had previously assumed around 17 billion US dollars. In addition, adjusted earnings per share are forecast at 0.25 US dollars, noticeably below the average analyst estimate of about 0.43 to 0.44 US dollars. Adjusted gross margin is expected to fall from 44.1 percent in the third quarter to around 38.0 percent in the fourth quarter.
Continued weakness in the PC segment and operational special charges
Several factors are responsible for the subdued outlook. The traditional PC business (Client Computing Group), which recorded a 5 percent decline in revenue to 8.10 billion US dollars in the third quarter, is suffering from continued market weakness and higher memory prices (DRAM/NAND). Intel expects global PC sales to decline by 12 percent for the full year 2026 and does not anticipate a sustained recovery before the second half of 2027. Added to this is a temporary disruption to manufacturing at Fab 28 in Kiryat Gat, Israel, following an industrial accident, which management expects to weigh on the fourth quarter by an estimated 300 million US dollars in lost revenue.
