Intel (INTC) Q3 2026 Earnings: What the Numbers Actually Say

Intel Corporation (NASDAQ: INTC) reported its third quarter of 2026 on October 29, and for the eighth quarter in a row it beat its own guidance on revenue, gross margin and earnings per share. The next day the stock lost 28.6%. To understand that gap, you have to read the quarter and the guidance as two separate documents.

The quarter: Intel’s data center business carried everything

Revenue of $16.5 billion was up 21% from a year earlier. Non-GAAP earnings per share came in at $0.52, more than double the $0.23 of the third quarter of 2025, and well ahead of the roughly $0.40 analysts had pencilled in. Non-GAAP gross margin reached 44.1%, about two points above the company’s own guide, and non-GAAP operating margin rose to 19.6% from 11.2%.

The engine was Data Center and AI. DCAI revenue reached $7.3 billion, up 78% year on year, which management called the strongest data center growth in 15 years. Granite Rapids, built on Intel 3, is now the largest product family in Intel’s server line-up, and the CFO said it has become accretive to gross margin. Management now expects DCAI to finish 2026 nearly $10 billion above where it expected the year to land when it began.

The client business told the opposite story. The Client Computing and Physical AI Group brought in $8.1 billion, down 5%, as a memory shortage squeezed PC builds and IT budgets. Within that, AI PC revenue still grew 35%, and Wildcat Lake, the low-cost Intel 18A client chip, is sold out.

Intel Foundry: losing less, still losing

Intel Foundry reported $6.7 billion of revenue, up 58%, most of it from Intel’s own product groups. The segment’s operating loss was $1.9 billion, an improvement of $236 million on the second quarter. Management said Intel 3 wafer costs are about 15% lower than in the first quarter, and that Intel 18A yields are improving at a double-digit rate. Wafer output on both nodes beat internal plans.

What the call did not contain was a named external wafer customer. Lip-Bu Tan said Intel expects a couple of customers to be ready to announce within the next two quarters, in an answer that began with advanced packaging, and that inbound interest in 18A-P is building. Investors heard that as another delay.

The guidance: why INTC fell 28.6%

Intel guided fourth-quarter revenue to $15.0–$16.0 billion, non-GAAP gross margin to 38.0% and non-GAAP EPS to $0.25. An analyst on the call put the revenue guide about $1.8 billion below consensus. Three things drove it:

1. Client inventory correction. Intel expects client revenue to fall more than 20% from the third quarter as PC makers cut inventory.
2. Fab 28 in Israel. An accident in mid-October halted the factory. Intel puts the hit at about $300 million of revenue and 200 basis points of gross margin in the fourth quarter.
3. Supply limits. Intel 3 output and a shortage of advanced substrates for EMIB packaging are capping how many server chips Intel can ship, even though demand exceeds supply.

Data center revenue is still expected to grow in the mid-teens percent from the third quarter. The guide is weak because of client and Israel, not because server demand faded. The share price, however, moved on the headline: from $92.07 at the October 29 close to $65.76 a day later.

Cash, capex and the INTC balance sheet

Operating cash flow was $5.1 billion in the quarter, gross capital expenditure $4.2 billion, and adjusted free cash flow $1.6 billion. In August Intel completed a $23 billion public equity offering, and the company expects about 5.44 billion diluted shares in the fourth quarter as a result.

Gross capex is on track for $20 billion in 2026, and the CFO said 2027 will be “up strongly”. He also said Intel probably will not generate positive free cash flow in 2027, calling it an investment year as 18A ramps, Intel 3 expands and 14A is prepared for production in 2028. Firm equipment orders rose nearly 40% from the previous quarter.

The Blue Team read

The quarter showed an Intel whose server franchise is supply-limited rather than demand-limited, whose foundry losses are narrowing, and whose new nodes are yielding better. The guide showed a company absorbing a PC downturn and an industrial accident at the same time, while committing to its heaviest spending year yet. Both pictures are accurate. The question for 2027 is which one dominates once the client correction and the Fab 28 hit have passed.

Sources: Intel Q3 2026 earnings release and Form 10-Q; Intel Q3 2026 earnings call, October 29, 2026; daily prices from Cboe via Fintel and Interactive Brokers.