Intel Stock Falls 28.6% in One Day After Weak Q4 Guidance, Even as Data Center Sales Jump 78%

Intel Corporation (INTC) lost 28.6% of its value on Friday, Oct. 30, closing at $65.76 and wiping out roughly $140 billion of market value in a single session. The sell-off came one day after Intel reported third-quarter results that beat its own guidance on revenue, gross margin, and earnings.

That’s a strange combination. The quarter was strong, but the outlook was not. Intel guided fourth-quarter revenue well below Wall Street’s estimates, pointing to a PC slowdown and an accident at a fab in Israel. Meanwhile, data center revenue rose 78%.

Here is what Intel reported, what it guided, and where the gap comes from.

Intel Beat Its Own Q3 Guidance, Then Guided Q4 Revenue 9% Below Wall Street

Q3 revenue came in at $16.5 billion, up 21% from a year earlier. In July, Intel had guided for $15.8 billion to $16.8 billion of revenue, a 42% non-GAAP gross margin, and non-GAAP EPS of $0.38. Here is how the quarter compared:

Metric	Q3 guidance	Q3 actual
Revenue	$15.8B to $16.8B	$16.5B
Non-GAAP gross margin	42.0%	44.1%
Non-GAAP EPS	$0.38	$0.52

Basically, revenue landed in the upper half of the range, margin came in 2.1 points above the target, and EPS beat it by about 37%. On the earnings call, CFO David Zinsner said it was the eighth straight quarter that Intel exceeded its own expectations.

The fourth-quarter outlook is where the trouble starts. Intel guided revenue of $15.0 billion to $16.0 billion and non-GAAP EPS of $0.25. Analysts were looking for $17.07 billion of revenue and $0.43 of EPS. At the $15.5 billion midpoint, the revenue guide sits 9.2% below the Street, and the EPS guide sits about 42% below it. Non-GAAP gross margin is guided to 38%, down from 44.1% in Q3.

The $1.57 Billion Revenue Gap Comes From a PC Slump and One Fab Accident

In mid-October, an accident at Intel’s Fab 28 in Kiryat Gat, Israel, caused employee casualties and injuries and halted production. According to Intel’s quarterly filing, the plant was down for about two weeks and is expected to restart by the end of October. The company expects charges for scrapped inventory, cleanup, and underused factory capacity. It also says the hit to gross profit could run through the first half of 2027. Intel can’t yet size the total cost or the insurance recoveries.

The plant matters. Intel has said a significant portion of its revenue comes from Intel 7 products made at its Israeli fab.

Zinsner’s early estimate is roughly $300 million of lost Q4 revenue and 200 basis points of gross margin, with a similar revenue hit expected in Q1 2027. On a $15.5 billion quarter, 200 basis points works out to about $310 million of gross profit.

Item	Amount
Street Q4 revenue estimate	$17.07B
Intel guidance midpoint	$15.50B
Gap	$1.57B
Fab 28 impact (Intel estimate)	about $0.30B (19% of gap)
Everything else	about $1.27B (81% of gap)

In other words, about four-fifths of the gap has nothing to do with the fab. Management points to a seasonal decline in the client segment, which is the PC business. Client revenue fell 5% to $8.1 billion in Q3, short of the roughly $8.98 billion analysts expected. Zinsner said the PC slowdown should last at least through the first half of next year, and he expects PC revenue to drop by a mid-20s percentage in Q4. Higher memory prices are a big reason PC makers are pulling back, according to ServeTheHome.

Data Center Revenue Grew 78% to $7.3 Billion

The Data Center and AI segment brought in $7.3 billion in Q3, up 78% year over year. Operating income more than tripled to $3.04 billion, a 41.5% operating margin, per ServeTheHome. Zinsner called it the strongest data center growth in 15 years.

Supply, not demand, is the constraint. CEO Lip-Bu Tan said Intel’s first priority is adding supply to meet what he described as extraordinary demand for the Xeon family. Zinsner also expects industry-wide server CPU unit shipments to grow more than 30% in both 2026 and 2027, according to the same TrendForce recap.

About Half of Intel’s Revenue Sits in the PC Market, and Foundry Still Loses Money

Client revenue of $8.1 billion is roughly half of Intel’s $16.5 billion in total sales, so the Q4 PC decline hits the biggest part of the business. Intel Foundry also lost $1.9 billion in the quarter. That is narrower than the $2.3 billion loss a year ago, but it remains a large drag.

I broke down the foundry side of the story in a video earlier this month, before the earnings drop. The main point still holds: Intel can build the chips, but the factories only pay off once outside customers put real volume through them. That $1.9 billion loss is the number to track.

On the balance sheet, Intel ended September with $54.0 billion of cash and short-term investments against $50.1 billion of total debt. A good chunk of that cash came from the stock sale Intel completed in August, which raised roughly $22.6 billion. Q3 operating cash flow was $5.1 billion, and capital spending took $4.0 billion. Zinsner also warned that Intel is unlikely to generate positive cash flow this year.

Intel Stock at $65.76 Trades at About 31x 2027 Earnings Estimates

Here is where the stock stands after the drop:

Metric	Value
Share price (Oct. 30 close)	$65.76
Market cap	$349.5B
2026 EPS estimate	$1.53 (43.0x)
2027 EPS estimate	$2.14 (30.7x)
Analyst target price	$101.02 (53.6% above current)
52-week range	$32.89 to $142.35

Those estimates look like pre-earnings numbers. The 2027 figure actually ticked up over the past week, so cuts are likely once analysts reset their models, which would push the multiples higher. Analysts are cautious: 32 of the 49 covering Intel rate it a Hold.

The stock is now down 45% from the $120.00 it closed at on Oct. 1 and sits 54% below its 52-week high. It is still about double its 52-week low.

What to Watch Next

Three items will shape the next report. First is whether Fab 28 restarts on schedule by the end of October. Second is whether data center revenue builds on the $7.3 billion Intel posted in Q3. Third is whether gross margin lands near the 38% guide, with the PC business expected to stay weak at least through the first half of 2027.