❯ Intel’s revenue rises 21%, but weak PCs and server supply constraints weigh on its outlook

The next quarter dominates the reactionIntel’s October 29 release reported approximately $16.5 billion of revenue, up 21%, and adjusted earnings of $0.52 per share. Its fourth-quarter outlook was $15 billion to $16 billion of revenue and $0.25 in adjusted EPS. GamesBeat reported an approximately 23% after-hours share decline following the weaker outlook.

Data centers grow while PCs weakenOn the earnings call, management said Data Center and AI revenue reached approximately $7.3 billion, up nearly 80% year over year, while Client Computing and Physical AI revenue was approximately $8.1 billion, down 5%. Server demand substantially exceeds supply, but advanced-packaging substrate shortages, manufacturing constraints and factory operational issues limit shipments and the conversion of demand into sales.

Memory costs suppress PC demandIntel said memory prices and availability are raising system costs against limited IT budgets, prompting PC manufacturers to reduce purchases and adjust inventories. Management expects the global PC unit market to decline approximately 12% in 2026 and another 10% in 2027, with weakness lasting at least through the first half of next year.

Margin pressure accompanies expansionIntel expects fourth-quarter adjusted gross margin of approximately 38%, down from 44.1% in Q3. It nevertheless plans increased equipment spending and component purchases, with capital expenditure expected to rise significantly next year to support server and agent workloads. Near-term production limits and longer-term expansion spending affect how quickly demand becomes profit and cash.

Foundry growth includes internal businessIntel Foundry reported approximately $6.7 billion of quarterly revenue, including intersegment transactions. External foundry revenue was approximately $411 million, with some growth driven by a non-recurring customer program. Intel continues developing 18A and 14A and pursuing outside customers. Assessing progress therefore requires process readiness, external orders and manufacturing ramps alongside total segment revenue.

▮ SIGNALAI demand creates opposing pressures for Intel: constrained server supply and memory-driven PC weakness show that infrastructure growth does not benefit every business evenly.