Intel Q3 Earnings Show Data-Center Strength, Fab 28 Hit

Intel Corp.'s (INTC) Q3 earnings, released Oct. 29, 2026, showed strong data‑center and AI growth but a manufacturing incident at Fab 28 and ongoing PC weakness weighed on fourth‑quarter guidance and divided analysts over the outlook.

Quarter Results and Fab 28 Impact

Intel reported third‑quarter revenue of $16.5 billion for the quarter ended Sept. 26, 2026, up 21.0% year over year. GAAP net income attributable to Intel was $3.3 billion, or $0.60 diluted earnings per share (EPS), while non‑GAAP EPS was $0.52. GAAP gross margin stood at 43.0%, with non‑GAAP gross margin at 44.1%. GAAP operating income rose to $2.5 billion from $683 million a year earlier. The company said revenue, gross margin, and EPS exceeded prior guidance.

Company materials and the earnings call highlighted record year‑over‑year growth in the Data Center and AI (DCAI) segment. Third-party summaries estimated DCAI revenue at about $7.3 billion, reflecting growth near 78%–80%.

Management guided fourth‑quarter revenue to $15.0 billion–$16.0 billion, with non‑GAAP gross margin of 38.0% and GAAP gross margin of 37.1%. It forecast GAAP diluted EPS of $0.10 and non‑GAAP EPS of $0.25, with non‑GAAP operating expenses around $4.4 billion and tax rates of 31.0% GAAP and 11.0% non‑GAAP.

The outlook incorporates an estimated $300 million revenue impact and a 200‑basis‑point gross-margin reduction from a manufacturing incident at Fab 28. The company’s Form 10‑Q reported that operations at the affected facility were suspended for about two weeks and expected to resume by the end of October 2026. It warned of potential charges related to scrapped inventory, remediation, cleanup, and under-absorbed capacity.

Management also cited substrate and memory supply constraints and said it would make disciplined investments in capacity and working capital to increase supply. The PC slowdown is expected to continue at least through the first half of 2027.

Analyst reactions were mixed. Some viewed the DCAI momentum as a structural offset to cyclical weakness, while others pointed to persistent PC softness and valuation concerns as unresolved near-term risks.

Nine-Month Results and Accounting

For the nine months ended Sept. 26, 2026, Intel reported revenue of $46.2 billion, up from $39.2 billion a year earlier. Operating cash flow rose to $13.2 billion from $5.4 billion in the prior period.

The Form 10‑Q recorded a $12.6 billion mark-to-market loss related to Escrowed Shares and a $3.9 billion non-cash goodwill impairment for Mobileye during the nine months. The filing also detailed manufacturing, supply-chain, geopolitical, and operational risks but did not report any acquisition or divestiture approvals, antitrust clearances, securities-regulator actions, or termination-fee provisions tied to the quarter.