Intel Beats Profit Estimates on a Data-Center Surge but Weak Guidance Sends Shares Down Sharply

Intel's third-quarter adjusted profit beat estimates as data-center revenue surged 78%, but its fourth-quarter guidance fell well short of expectations.

Intel Corporation reported third-quarter 2026 results on Thursday, Oct. 29, 2026. The quarter covered the three months ended Sept. 26, 2026.

Revenue was $16.51 billion, up 21% from $13.65 billion a year earlier. Analysts polled by FactSet had expected $16.56 billion, according to Dow Jones Newswires.

Adjusted profit was $0.52 a share, up 126% from $0.23 a year earlier. Analysts polled by FactSet had expected $0.41 a share.

Reported profit was $0.60 a share, down from $0.90 a year earlier. Net income attributable to Intel fell 18% to $3.3 billion.

Reported profit fell even as operating profit rose sharply. Interest and other income dropped to $1.1 billion from $3.7 billion a year earlier.

Adjusted net income was $2.8 billion, up 169% from $1.0 billion. The adjusted measure strips out items the company treats as one-time.

Gross profit was $7.1 billion, up from $5.2 billion a year earlier. Operating income was $2.5 billion, up from $700 million.

“Revenue, gross margin and earnings per share exceeded guidance,” said David Zinsner, Intel's finance chief. He called data-center growth the strongest in 15 years.

The company said results demonstrate improving execution and expanding supply. Tan pointed to continued advancement of Intel's process technology.

Data-center surge carried the quarter

Data Center and AI revenue rose 78% to $7.3 billion. The precise segment total was $7.32 billion, the release table showed.

Intel Products revenue rose 22% to $15.4 billion in total. Operating cash flow was $5.1 billion in the quarter.

Reported gross margin was 43.0%, up from 38.2% a year earlier. Adjusted gross margin was 44.1%, up from 40.0%.

Reported operating margin was 15.3%, up from 5.0% a year earlier. Adjusted operating margin was 19.6%, up from 11.2%.

Data-center operating income was $3.0 billion, up from $1.0 billion a year earlier. Client computing operating income fell to $2.3 billion from $2.7 billion.

Cash and cash equivalents ended the quarter at $21.8 billion. Short-term investments added a further $32.2 billion.

“Our immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family,” said Lip-Bu Tan, Intel's chief executive. Xeon is Intel's server processor family.

Client computing fell as foundry grew

Client Computing and Physical AI revenue fell 5% to $8.1 billion. That group sells the processors that power personal computers.

Intel Foundry revenue rose 58% to $6.7 billion before eliminations. Intersegment eliminations were $6.3 billion, so most of that total reflects internal work.

The foundry unit posted an operating loss of $1.85 billion. All Other revenue fell 30% to $700 million.

Intel released its 14A 0.9 process design kit in October. A process design kit gives chip designers the rules for building on a new process.

Intel also announced work with ASML on High-NA EUV readiness. EUV is the lithography technology used to print the smallest chip features.

Intel also announced a multiyear Xeon collaboration with Oracle. The work is intended to expand Xeon-based computing on Oracle's cloud platform.

Guidance landed well below expectations

For the fourth quarter, Intel guided revenue to $15.0 billion to $16.0 billion. Analysts polled by FactSet had expected $17.29 billion.

The company guided adjusted profit to $0.25 a share for the quarter. Analysts polled by FactSet had expected $0.45 a share.

Reported profit guidance was $0.10 a share. Guided gross margin was 37.1% on a reported basis and 38.0% adjusted.

The guided reported tax rate is 31%, against 11% adjusted. That gap helps explain why reported guidance sits far below adjusted guidance.

“Despite near-term headwinds across the PC industry, demand for our CPUs remains robust,” Tan said. CPUs are the central processing units at the heart of computers.

Zinsner said the PC slowdown continues at least through the first half of 2027. That outlook weighs on the client group, Intel's largest product unit.

Intel completed a $23 billion public equity offering during the quarter. The company said the raise supports growth while keeping an investment-grade rating.

Intel also announced plans to acquire Classiq. Classiq makes quantum software tools that Intel plans to combine with its own quantum work.

Shares fell sharply after hours

The guidance gap, not the quarter, drove the reaction. Third-quarter profit beat, while the fourth-quarter guide missed on both profit and revenue.

Shares fell 17% to $76.85 in after-hours trading on Thursday, Dow Jones Newswires reported. The stock had closed down 3.6% at $92.07.

That snapshot was reported at 4:36 p.m. ET on Oct. 29. Later after-hours levels may differ from that print.

The stock had more than doubled this year through Thursday's close. The after-hours fall therefore cut into a large run, not a weak year.

What remains unknown

What remains unknown is whether Xeon supply expands fast enough to hold data-center demand. Foundry losses and the pace of outside customer wins also remain open.

What to watch is fourth-quarter revenue against the $15.0 billion to $16.0 billion guide. Investors will also watch whether the PC slowdown deepens into 2027.