On paper, Intel had a good quarter. The market cared far more about what comes next.
Intel reported third-quarter revenue of $16.51 billion, up 21% from $13.7 billion a year earlier and in line with estimates. Adjusted earnings came in at 52 cents a share, well ahead of the 40 cents analysts expected, according to CNBC. Then the company guided fourth-quarter revenue to $15 billion to $16 billion, against roughly $17.1 billion on Wall Street, with adjusted EPS of 25 cents versus 43 cents expected.
Two very different businesses
The split inside the numbers tells the story. Data center and AI revenue jumped 78% to $7.3 billion, which Intel called its strongest data center growth in 15 years. Client computing, which includes PC chips, fell 5% to $8.1 billion and missed estimates.
“We see the PC slowdown continuing at least through the first half of next year,” CFO David Zinsner said. CEO Lip-Bu Tan said the immediate priority is to “unlock additional supply to meet extraordinary demand for our Xeon family.”
A factory setback, too
Calcalist reports that an explosion at Intel’s Kiryat Gat plant in Israel, which mainly makes data center chips, shut the facility for about two weeks. Intel estimates the incident will cut fourth-quarter revenue by about $300 million and gross margin by roughly 200 basis points, with a similar revenue hit expected in the first quarter.
Wall Street reacts
Shares fell roughly 25% on Friday, and several firms cut price targets. Bank of America downgraded the stock to neutral. Its analyst Vivek Arya pointed to a sharp drop in PC shipments and tight substrate supply for server chips. UBS’s Timothy Arcuri said he sees “no relief in sight for memory pricing/supply.” Before the report, the stock was up about 150% this year.
Why it matters
Intel’s quarter is a snapshot of the whole market: AI and server demand are booming while memory costs and supply limits squeeze PCs. For IT buyers, that likely means tighter laptop and desktop availability and less negotiating room on refresh projects.
For hardware resellers, MSPs and device-as-a-service vendors, it is a cue to talk to customers early about refresh timing, lifecycle extension and budget planning. Sellers who explain the supply picture clearly will look like advisers, not just order-takers.
Sources: Intel, CNBC, CNBC, Calcalist Ctech. Written by the xRapid Media LLP team.
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