Intel’s fourth-quarter outlook, issued Thursday, fell below analyst estimates as a factory shutdown in Israel and weak PC demand tempered a strong rise in data-center sales.
Intel forecast fourth-quarter revenue of $15 billion to $16 billion and non-GAAP earnings of 25 cents per share. Reuters, citing LSEG data, reported analyst averages of $17.07 billion in revenue and 43 cents in adjusted earnings per share. Intel also projected GAAP earnings of 10 cents per share. Reuters and CTech reported that its shares fell about 23% in after-hours trading.
For the quarter ended Sept. 26, Intel reported revenue of $16.5 billion, up 21% from a year earlier, and non-GAAP earnings of 52 cents per share. Data Center and AI revenue rose 78% to $7.3 billion, while the Client Computing and Physical AI Group brought in $8.1 billion, down 5%. Intel forecast that the client group’s revenue would fall more than 20% sequentially in the fourth quarter.
Intel linked weaker PC demand to memory prices and availability, limited IT budgets and customer inventory reductions. Intel Chief Financial Officer David Zinsner said, “Looking ahead, we see the PC slowdown continuing at least through the first half of next year.” The company projected industrywide server CPU unit growth of more than 30% in both 2026 and 2027, while saying supply constraints would continue through 2027 and into 2028.
Intel said the disruption at its Kiryat Gat site would reduce fourth-quarter revenue by about $300 million and gross margin by 200 basis points, and affect server shipments. CTech reported that an Oct. 14 explosion there killed two workers and seriously injured a third, citing hospital information and an Intel statement.
Intel projected gross capital expenditures of $20 billion in 2026, with spending expected to rise strongly in 2027. Intel Foundry reported a $1.9 billion operating loss in the third quarter.
In an interview with Reuters, Zinsner said the factory had been out of operation for two weeks and Intel expected a similar revenue impact in the first quarter of 2027. He said the company was still assessing which wafers could be salvaged.