Intel Stock Sinks Over 20% as Chipmaker Warns PC Slowdown Will Persist

Intel lost more than a fifth of its market value in late trading on 29 October 2026 after warning that a global slump in personal computer sales will drag on into next year and flagging disruption from a deadly factory explosion in Israel, despite reporting stronger-than-expected quarterly results.

CNBC reported the sell-off after Intel forecast fourth-quarter revenue of $15 billion (about £11.23 billion) to $16 billion (about £11.98 billion). The chipmaker also projected adjusted earnings per share (EPS) of $0.25 (about £0.19).

Even the top of that revenue range sits below Intel's third-quarter total. The outlook also incorporates disruption from a deadly explosion at an Israeli factory, adding a manufacturing setback to the pressures facing its PC business.

PC Weakness Expected to Continue Into 2027

'We see the PC slowdown continuing at least through the first half of next year,' chief financial officer David Zinsner said in Intel's earnings release.

Revenue from Intel's Client Computing Group (CCG), which supplies processors for PCs, fell 5 per cent from a year earlier to $8.1 billion (about £6.07 billion). That contrasted with rapid expansion in its data centre and AI operations.

The broader industry also faces pressure. Global PC shipments declined 4 per cent year on year in the second quarter as memory and other component costs increased, according to Counterpoint Research figures cited by CNBC.

Factory Explosion Adds to Revenue Pressure

An explosion at Intel's fabrication plant in Israel killed two workers and seriously injured a third earlier in October, CNBC reported. Zinsner said the incident would cost Intel approximately $600 million (about £449 million) in revenue across two quarters, according to the broadcaster's account of the earnings call.

Chief executive Lip-Bu Tan described it as an 'unfortunate and tragic accident' that forced an 'extended shutdown'. The disruption affected shipments of chips made using Intel's 10-nanometre manufacturing process.

That production interruption compounds the challenge of supplying customers while demand varies between the company's businesses.

Quarterly Earnings Beat Expectations Despite Share Slump

Intel's third-quarter adjusted EPS reached $0.52 (about £0.39), exceeding the $0.40 (about £0.30) analyst forecast cited by CNBC.

Revenue rose 21 per cent to $16.51 billion (about £12.36 billion), broadly in line with expectations of around $16.5 billion (about £12.36 billion), per CNBC.

Results calculated under generally accepted accounting principles (GAAP) showed EPS of $0.60 (about £0.45). Net income attributable to Intel fell 18 per cent to $3.3 billion (about £2.47 billion).

Gross margin increased to 43 per cent from 38.2 per cent a year earlier. However, Intel expects that measure to fall to 37.1 per cent in the fourth quarter, alongside GAAP EPS of $0.10 (about £0.07).

The company generated $5.1 billion (about £3.82 billion) in operating cash during the third quarter. Zinsner said revenue, gross margin and EPS all exceeded Intel's own guidance.

Data Centre and AI Divisions Power Ahead

Revenue in Intel's data centre and AI business jumped 78 per cent to $7.3 billion (about £5.47 billion). Zinsner described the performance as its strongest data centre revenue growth in 15 years.

Intel Foundry revenue increased 58 per cent to $6.7 billion (about £5.02 billion). Those segment sales include transactions within Intel, which the company removes when calculating consolidated revenue.

Tan said demand for Intel's central processing units (CPUs) remained strong, with increasing supply of Xeon server processors an immediate priority.

CNBC reported that Intel has benefited from the rise of agentic AI, which performs tasks through sequences of actions. Such applications use CPUs to coordinate computing tasks and data, complementing graphics processors used for AI models.

Intel also announced plans for a multiyear Oracle collaboration to expand Xeon-based cloud computing. Meanwhile, Zinsner said the company would continue investing in production capacity and working capital to increase supply and support future growth.