Intel Corporation stock fell 23.04% in after-hours trading to $70.86 following the company's announcement of significantly reduced Q4 guidance, according to earnings communications released today.
Q3 Results Exceeded Expectations
Intel's third-quarter performance beat Wall Street estimates across multiple metrics. Net revenue reached $16.51 billion, up 21% year-over-year compared to expected $16.48 billion. Adjusted earnings per share came in at $0.52, beating the $0.40 consensus estimate. Adjusted operating margin improved to 19.6%, up from 11.2% in the prior-year period.
The data center and AI segment drove growth, with revenue jumping 78% year-over-year to $7.3 billion. Intel Foundry Services revenue surged 58% year-over-year to $6.7 billion, reflecting improved yields on advanced process nodes.
However, the Client Computing Group—which produces PC chips—saw revenue decline 5% to $8.1 billion, missing estimates amid elevated memory costs and constrained IT budgets.
Weak Outlook Triggers Sell-Off
Intel projected Q4 revenue between $15.0 billion and $16.0 billion, below Wall Street's $17.1 billion forecast. The company also projected Q4 earnings per share of $0.25, well below analyst expectations of $0.43.
The company attributed the weak guidance to three factors. First, PC demand is expected to decline further into 2027, with the company warning of a 10% purchase contraction next year. Second, a semiconductor fabrication plant disruption in Israel following a gas cylinder malfunction is expected to cost $300 million in revenue in each of the next two quarters. Third, Intel plans to increase capital expenditure beyond the $20 billion targeted for 2026, raising concerns about near-term free cash flow generation.
The stock decline erased approximately $112 billion in market capitalization in after-hours trading. Intel had gained roughly 150% year-to-date prior to today's report.
