In brief
Intel reported a 21% YoY revenue rise to $16.51bn driven by data‑center and AI growth, while net income fell 18% to $3.32bn. Gross margin improved to 43%, and the company forecast fourth‑quarter revenue of $15–$16bn with a lower margin. CEO Lip‑Bu Tan highlighted robust CPU demand and supply priorities.
San Francisco — On Thursday, U.S. chipmaker Intel announced that its fiscal 2026 third‑quarter revenue increased 21 percent year over year to $16.51 billion, driven primarily by strong growth in its data‑center and artificial‑intelligence segments. The company also reported that net income fell 18 percent to $3.32 billion, its first quarterly decline in profitability in more than a decade.
Intel’s revenue growth was led by a 78 percent increase in its Data Center and AI segment, which generated $7.30 billion, its highest data‑center revenue in 15 years. The Client Computing and Physical AI Group, meanwhile, reported a 5 percent decline to $8.10 billion, reflecting continued challenges in the personal‑computer market.
Net income attributable to Intel dropped to $3.32 billion from $4.06 billion a year earlier, with diluted earnings per share falling to $0.60 from $0.90. Non‑GAAP diluted earnings per share rose to $0.52 from $0.23, underscoring the impact of reporting adjustments.
The company’s gross margin improved to 43 percent in the quarter, up from 38.2 percent a year earlier, reflecting higher margins on its data‑center and AI products compared with lower‑margin consumer PC items.
Intel Foundry, the semiconductor‑manufacturing arm of the business, reported revenue of $6.70 billion, a 58 percent year‑over‑year increase, inclusive of transactions with other Intel business units.
Intel CEO Lip‑Bu Tan highlighted that demand for the company’s central processing units remained robust despite near‑term headwinds in the PC industry.
“Demand for the company’s central processing units remained robust despite near‑term headwinds in the PC industry, adding that increasing supply to meet demand for Xeon server processors was an immediate priority.”
For the fourth quarter, Intel projects revenue of between $15 billion and $16 billion and diluted earnings per share of $0.10 under GAAP and $0.25 on a non‑GAAP basis, with a gross margin forecast of 37.1 percent, a decline from the 43 percent margin earned in the third quarter.
The company’s performance comes at a time when the broader semiconductor industry is navigating supply‑chain constraints and rising demand for AI‑accelerated workloads, prompting a shift from traditional PC sales to data‑center and cloud‑based services.
The company’s results underscore a faster pace of revenue growth in high‑margin AI and data‑center divisions, while net income compression reflects increased channel costs and investment in new manufacturing capacity.
