Key Takeaways
- Intel (INTC) shares fell about 24% pre-market after it guided fourth-quarter revenue to $15 billion to $16 billion, below the roughly $17.1 billion analysts expected.
- PCs drive the sequential decline: client revenue is set to fall more than 20% from $8.1 billion, a drop of at least $1.6 billion, as memory prices hit PC demand.
- The Israel fab explosion costs about $300 million, roughly a fifth of the gap to consensus, with a similar hit expected in the first quarter.
- Intel guided data center revenue up a mid-teens percentage to roughly $8.4 billion, which would make it a bigger business than PCs this quarter.
Intel shares are down about 24% pre-market, near $70, after the chipmaker guided fourth-quarter revenue to $15 billion to $16 billion on Thursday night. Analysts expected about $17.1 billion.
The third quarter beat. The twist is inside the guide: client revenue is set to fall more than 20% from the third quarter, a bigger drop than the entire gap to consensus, while data center grows by a mid-teens percentage.
What Intel Guided for the Holiday Quarter
- Non-GAAP EPS of $0.25, against the $0.43 consensus.
- Non-GAAP gross margin of 38%, down from 44.1% in the third quarter.
- Client revenue down more than 20% from $8.1 billion, as memory prices choke PC demand. Intel sees PC units falling 12% this year and 10% in 2027.
- About $300 million lost to the October 14 explosion at its Israel fab, which killed two workers, with a similar hit in the first quarter.
Intel’s PC Slide Is Bigger Than the Whole Miss
Client’s 20%-plus drop takes at least $1.6 billion off $8.1 billion. Yet total revenue is guided down only about $1 billion from $16.5 billion, so the rest of Intel is guided higher, even after the fab hit.
Data center revenue rose 78% in a year to $7.3 billion, and Intel guided a mid-teens sequential gain, to roughly $8.4 billion, fab hit included. With client guided below about $6.5 billion, data center becomes Intel’s biggest segment.
The fab accounts for about a fifth of the miss. Of the two segments Intel guided, only PCs are headed lower.
TIKR Tracks 53 Analysts on Intel. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Intel, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Intel’s Analyst Ratings
What Intel’s Price Already Assumes
The selloff erases roughly $116 billion of market value over a quarter guided $1.6 billion short. As of last week, Intel traded at 51x forward earnings, right at its five-year average.
The Two Intel Numbers to Watch in January
Intel sees PC weakness through at least mid-2027, so January won’t fix PCs. Watch client revenue against its below-$6.5 billion outlook and data center against roughly $8.4 billion. If data center gets there, the market is pricing Intel like a PC company in the quarter it stops being one.
So What Is Intel Stock Actually Worth?
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