The key facts

  • Intel's Q3 revenue rose 21% year-on-year to $16.5 billion, surpassing the company's own forecast
  • The Data Center and AI segment grew 78% to $7.3 billion, marking the fastest growth in 15 years; Foundry revenue increased 58% to $6.7 billion
  • The Client Computing segment declined 5% to $8.1 billion; the CFO expects continued weakness in the PC market at least until the first half of 2027

Record growth in the data center segment amid a weak PC market

American semiconductor manufacturer Intel reported a 21% year-on-year revenue increase in the third quarter, reaching $16.5 billion compared to $13.7 billion a year earlier, exceeding its own forecast. This was reported by Anadolu citing the company's financial report. The main driver was demand for processors used in data centers and artificial intelligence.

Revenue structure: contrast between segments

The Data Center and AI segment grew 78% year-on-year to $7.3 billion, representing the fastest segment growth rate in 15 years. Intel Foundry contract manufacturing revenue increased 58% to $6.7 billion. In contrast, the Client Computing and Physical AI segment declined 5% to $8.1 billion due to ongoing weakness in the personal computer market. Thus, the company's growth is entirely driven by its server operations and Foundry, while its traditional client business continues to shrink.

Profit and margins

Under GAAP standards, net profit fell 18% to $3.3 billion ($0.60 per diluted share) compared to $4.1 billion ($0.90) a year earlier. On an adjusted basis (non-GAAP), net profit surged 169% to $2.8 billion, or $0.52 per share, versus $1.0 billion ($0.23) in the third quarter of 2025. Gross margin improved to 43% from 38.2%, while operating margin rose to 15.3% from 5%. The divergence between the decline in GAAP profit and the growth in adjusted figures reflects the impact of one-time items that the company excludes from its non-GAAP metrics.

Management statements and outlook

Intel CEO Lip-Bu Tan stated that third-quarter results demonstrate improved execution, significant progress in expanding the product portfolio, and advancement in processor technologies. According to him, despite current challenges in the PC industry, demand for the company's processors remains strong. CFO David Zinsner warned that the slowdown in personal computer demand is expected to persist at least until the first half of 2027.

Corporate developments and fourth-quarter expectations

During the quarter, Intel completed a public share offering worth $23 billion to strengthen its balance sheet and announced plans to acquire the quantum software platform Classiq. For the fourth quarter of 2026, the company forecasts revenue in the range of $15–16 billion, with diluted earnings per share of $0.10 under GAAP and $0.25 under non-GAAP.