Intel’s stock declined sharply in extended trading on Thursday following the company’s announcement of a weaker-than-expected fourth-quarter forecast. The chipmaker attributed the miss to continued softness in the global personal computer market, which analysts have noted declined 4% in the second quarter due to elevated costs for memory and other semiconductor components.
Third-quarter results showed mixed performance. The company posted revenue of $13.7 billion, representing a 21% increase from the prior year. However, Intel’s client computing and physical AI division experienced a 5% decline to $8.1 billion and missed analyst estimates. Conversely, the data center and AI segment demonstrated strength, with revenue jumping 78% to $7.3 billion. For the current quarter, Intel guided toward adjusted earnings per share of 25 cents on revenue between $15 billion and $16 billion, falling short of analyst expectations for 43 cents in EPS and $17.1 billion in revenue.
Intel’s finance chief noted that the company anticipates the PC slowdown to persist through the first half of the following year but expressed confidence in opportunities within the broader business portfolio. The guidance also reflected an estimated $600 million impact from an explosion at the company’s Israeli fabrication facility earlier in the month, an incident that resulted in fatalities and serious injuries. The company indicated plans to resume production at that location by the end of the week.
Despite recent declines, Intel’s shares had appreciated substantially earlier in the year before facing headwinds related to concerns about the scale of artificial intelligence infrastructure investments. The company positions itself as a beneficiary of agentic AI applications, which rely on central processing units to orchestrate tasks, distinguishing Intel from competitors focused on graphics processors.
Intel continues advancing its foundry business, including high-volume production of advanced chips at its Arizona facility as an alternative to Taiwan-based suppliers. The company is also expanding partnerships, as evidenced by Oracle’s announcement this week of an expanded deployment agreement for Intel’s next-generation server processors.
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