In a financial release dated October 29 2026, U.S. semiconductor maker Intel announced that its third‑quarter revenue increased 21 percent year‑on‑year to $16.51 billion, driven by a surge in data‑center and artificial‑intelligence (AI) sales, while net income fell 18 percent to $3.32 billion. The company reported that the earnings per share—both under the current accounting standards (GAAP) and on a non‑GAAP basis—declined, although the non‑GAAP EPS rose from $0.23 to $0.52. The release, supplied by Xinhua, also highlighted a rise in the gross margin to 43 percent, up from 38.2 percent a year earlier.
Revenue from Intel’s Data Center and AI business surged 78 percent YoY to $7.3 billion, marking the firm’s strongest growth in that segment over the past 15 years. In contrast, sales in the Client Computing and Physical AI Group fell 5 percent to $8.1 billion, reflecting ongoing softness in the personal‑computer market. The company’s Foundry, its semiconductor‑manufacturing arm, posted $6.7 billion in revenue—a 58 percent YoY increase, which includes transactions with other Intel business units.
Intel CEO Lip‑Bu Tan announced that demand for its central‑processing‑units continued to be robust, especially for Xeon server processors, and that immediately increasing supply would be a priority to meet that demand. The CEO also noted headwinds in the PC industry but indicated that Intel’s core strengths in data‑center and AI markets would support future growth.
When projecting fourth‑quarter performance, Intel guided revenue to a range of $15–$16 billion and indicated a drop in the GAAP gross margin to 37.1 percent. Under GAAP, diluted earnings per share were forecast at $0.10, with a non‑GAAP estimate of $0.25. The guidance reflects expectations that the company will continue to press toward higher‑margin business lines while managing cost pressures from the personal‑computer segment.
Gross margin—defined in plain language as the difference between revenue and the cost of goods sold, expressed as a percentage of revenue—improved in the third quarter, reflecting higher‑margin product sales and efficient manufacturing. However, the projected decline in the fourth‑quarter margin suggests that the company expects increasing manufacturing or logistics costs, or a shift toward lower‑margin product lines, in the coming period.
Intel’s focus on AI has been a strategic pivot in its broader corporate strategy. The company announced a significant investment in AI research and development in 2024 and has continued to expand its AI‑optimized server chip line, which has become a key driver of its revenue gains. Analysts from major research firms have noted that Intel’s ability to expand supply of Xeon processors could insulate it from the headwinds seen in the broader PC market, which has experienced a continued decline in personal‑computer sales globally.
Key figures for the quarter are summarized below: Revenue rose to $16.51 billion, up 21 percent YoY; Net income was $3.32 billion, down 18 percent; Gross margin increased to 43 percent; GAAP diluted EPS diminished to $0.60, compared with $0.90 a year earlier; and non‑GAAP diluted EPS increased to $0.52 from $0.23.
Intel’s management also remarked on the competitive landscape, noting that remaining cautious about price adjustments could dampen short‑term earnings, yet viewing the robust demand for data‑center workloads as a positive indicator for the near‑term outlook.
The company’s fourth‑quarter forecast also advises investors to expect an earnings “shoulder‑down” in comparison to the third quarter, as reflected in the lower margin guidance and the earnings per share targets. The company's guidance represents a shift in strategy aimed at consolidating its position in high‑growth, high‑margin segments while responsibly managing the decline in the PC sector.
These financial results come amid broader market reactions to AI‑related earnings announcements across Asia, where shares of tech firms have seen mixed responses. Even though Intel has shown a solid revenue increase, its net income contraction underscores the volatility of the semiconductor market amid varying demand cycles and pricing dynamics.
Overall, Intel’s third‑quarter performance signals that the company’s pivot toward data‑center and AI infrastructure is bearing fruit in terms of revenue growth, even as it navigates pressures in its traditional PC business and faces the challenge of sustaining profitability in an increasingly competitive market.