Intel reports 21% revenue growth in Q3 2026, driven by data-center surge but warns of PC slowdown and lower Q4 margins

Intel Corp. posted third-quarter 2026 revenue of $16.5 billion, up 21% from a year earlier, as its Data Center and AI (DCAI) group generated $7.3 billion, a 78% year-over-year increase. Operating income for DCAI more than tripled to $3.04 billion.

"Our strongest data-center growth in 15 years reflects extraordinary demand for Xeon," said CEO Lip-Bu Tan.

The company's PC segment, part of the Client Computing and Physical AI Group (CCPG), declined 5% to $8.1 billion, with operating income falling to $2.29 billion. CFO David Zinsner warned that the PC slowdown is expected to continue through at least the first half of next year, citing industry-wide substrate and memory shortages.

Intel's foundry business reported $6.7 billion in revenue, up 58% year over year, but posted an operating loss of $1.85 billion, an improvement from a $2.32 billion loss in the same quarter last year.

Non-GAAP gross margin rose to 44.1% from 40.0% and non-GAAP operating margin increased to 19.6% from 11.2%. During the quarter Intel announced the 14A 0.9-micron process design kit and new collaborations with ASML on High-NA EUV, as well as joint projects with Lam Research and Applied Materials.

For the fourth quarter, Intel forecast revenue of $15 billion to $16 billion, below the current quarter level, and expects non-GAAP gross margin to fall to about 38%, roughly half of the third-quarter result. The company did not provide segment-level guidance or a detailed explanation for the anticipated margin decline.

"Our immediate priority is unlocking more supply to meet the demand for Xeon," Tan added.

Analysts will watch upcoming updates for clarification on product mix, ramp costs, and memory pricing that could affect margins.