INTRO: Intel delivered solid third-quarter results, with revenue and earnings beating Street expectations. The company also provided guidance for the upcoming quarter, which was ahead of the Street. To cap off a successful quarter, Intel announced an 8:1 stock split. In this blog post, we’ll dive deeper into Intel’s Q3 results and provide analysis on the company’s outlook and growth prospects.

REVENUE: Intel’s non-GAAP operating EPS of $0.52 was above GS at $0.47 and the Street at $0.39. CCG revenue of $8.1 billion was below GS at $9.0 billion and the Street at $8.9 billion. DCAI revenue of $7.3 billion was above GS at $7.1 billion and the Street at $6.6 billion. Intel Foundry revenue of $6.7 billion was above GS at $6.1 billion and the Street at $6.0 billion.

DATA CENTER CPU STRENGTH: Intel’s DCAI segment grew 17% QoQ and 78% YoY, driven by strength in general-purpose server demand as well as agent AI. Going forward, Intel sees an accelerating server CPU market being driven by agentic AI with sustained unit strength and higher ASPs – with units expected to grow over 30% in 2026 and 2027 – and a TAM of ~$200 billion by 2030. The company expects to see mid-teens sequential growth in DCAI for 4Q as additional supply comes on line, as the company continues to run in a capacity shortage position.

WEAKENING PC MARKET: Management pointed to a meaningfully weaker PC environment extending into 2027, with limited IT budgets, elevated inventories, and memory constraints weighing on demand. Intel expects 2026 PC units to decline ~12%, followed by another ~10% TAM decline in 2027, with the weakness skewed toward 1H as customers aggressively reduce purchases to align inventory with consumption. Client revenue is expected to fall ~20% QoQ in 4Q, with the inventory correction extending through 1Q and potentially into 2Q, alongside normal seasonal pressure.

GUIDANCE: 4Q guidance is well below the Street. Intel guided 4Q revenue and gross margin well below the Street. Revenue was guided to $15.5 billion at the midpoint, which is well below GS at $18.0 billion and the Street at $17.0 billion. Non-GAAP gross margin was guided to 38%, which is far below GS at 43.6% and the Street at 42.5%. Non-GAAP EPS was guided to $0.25, which is also below GS at $0.46 and the Street at $0.43.

STOCK SPLIT: To cap off a successful quarter, Intel announced an 8:1 stock split. This means that for every share of Intel stock held, investors will receive 8 shares. The stock split is expected to take place in the coming months.