Intel shares fell about 28% on Friday morning, October 30, after the chipmaker forecast a weaker holiday quarter than the one it just reported. The stock traded at $66.18 at 10:33 a.m. Eastern, down $25.89 from Thursday's close, according to Nasdaq's real-time quote, and had traded as low as $64.12.
The third quarter itself beat Intel's own targets. Revenue rose 21% from a year earlier to $16.5 billion, and the company said revenue, gross margin and earnings per share all came in above its guidance, according to the results it filed with the SEC on Thursday.
The forecast behind the drop
Intel's outlook for October through December points down on every major line:
- Revenue: $15.0 billion to $16.0 billion, after $16.5 billion in the third quarter
- Adjusted gross margin: 38.0%, down from 44.1%
- Adjusted earnings per share: $0.25, down from $0.52
- Earnings per share under standard accounting: $0.10, down from $0.60
"We see the PC slowdown continuing at least through the first half of next year," Chief Financial Officer David Zinsner said. Sales in the unit that makes laptop and desktop chips fell 5% from a year earlier to $8.1 billion, the only one of Intel's three main businesses to shrink.
Where Intel is growing
Data center and AI revenue jumped 78% to $7.3 billion, which Zinsner called the company's strongest data center growth in 15 years. Chief Executive Lip-Bu Tan said Intel's "immediate priority is to unlock additional supply to meet extraordinary demand" for its Xeon server processors.
Intel Foundry, the manufacturing business, grew 58% to $6.7 billion.
The company also completed a $23 billion stock offering during the quarter and announced plans to buy Classiq, a quantum computing software company.
Where the stock stands
Even after Friday's drop, the stock was about double the low end of its 52-week range of $32.89 to $142.35, and less than half its high. The PC chip unit was still Intel's largest business by revenue in the third quarter, and the company's own forecast has its slowdown lasting at least into mid-2027.
Intel's adjusted figures exclude items such as share-based compensation and the amortization of acquired intangible assets; its release includes the full reconciliation to standard accounting.
