Intel shares tumble over 20% after weak quarterly outlook amid PC slowdown
Intel reported earnings that beat estimates but warned of a slowing PC market and a costly plant accident, sending its stock down more than 20% in after-hours trading.
Intel Corp. posted third-quarter earnings of $0.52 per share, surpassing Wall Street’s $0.40 estimate, and revenue of $16.51 billion, slightly above analysts’ $16.5 billion target. Net income fell to $3.3 billion from $4.1 billion a year earlier. Despite the beat, the company forecast fourth-quarter earnings of about $0.25 per share and revenue between $15 billion and $16 billion, well below analysts’ expectations of $0.43 per share and $17.1 billion in sales.
Revenue from the client computing and physical AI segment declined 5% to $8.1 billion, reflecting a broader slowdown in global PC shipments, which fell 4% in the second quarter, according to Counterpoint Research. By contrast, the data center and AI unit posted a 78% revenue jump to $7.3 billion.
Finance chief David Zinsner said the PC market slowdown is expected to continue into at least the first half of next year and emphasized disciplined investment in capacity and working capital. He also disclosed that an explosion at an Israeli fabrication plant, which killed two workers and injured a third, will cost Intel roughly $600 million in lost revenue over the next two quarters.
Chief Executive Lip-Bu Tan described the incident as an "unfortunate and tragic accident" that caused an extended shutdown of the plant and delayed shipments of new 10-nanometer chips. He reiterated confidence in long-term demand for Intel’s CPUs and said the company expects new customers for its foundry business within the next two quarters, while progress continues on the upcoming 14A chips.
Intel’s recent revival has been driven by demand for its CPUs in emerging agentic AI workloads, even as rivals such as Nvidia and AMD dominate the GPU market. The company also noted ongoing discussions about leasing capacity at its Ohio fab to memory-chip maker SK hynix, though no agreement has been finalized.