Intel Stock Plunges as Weak Q4 Guidance Triggers Price Target Cuts

A strong quarter undone by a weak outlook

Intel just had a good quarter, and its stock still had one of the worst trading days in its history. The reason was the forecast. On October 29, the chipmaker reported third-quarter 2026 results that beat most of Wall Street's profit measures. Its guidance for the December quarter came in far below expectations, and on Friday analysts cut their ratings and price targets one after another.

The third-quarter numbers were solid. Revenue was $16.5 billion, up 21% from a year earlier. Non-GAAP earnings were 52 cents per share, against 23 cents in the same quarter of 2025.14 GAAP earnings were 60 cents per share.14 Non-GAAP gross margin was 44.1%, about 200 basis points above the company's own guidance. Earnings per share also beat Intel's 38-cent forecast by a wide margin.15 Finance chief David Zinsner said it was the eighth straight quarter in which Intel topped its own financial targets.17

The fourth-quarter outlook wiped out that goodwill. Intel expects revenue of $15 billion to $16 billion, adjusted EPS of 25 cents and non-GAAP gross margin of 38%.11 By LSEG's count, analysts had expected 43 cents per share and $17 billion in revenue.1 Benzinga calculated that the $15.5 billion midpoint is about 9% below consensus. Its figures also put the margin guide well under the 42.4% Wall Street had modeled.10

How the market reacted

The selling was steep. Shares closed Thursday at $92.07 and fell about 21% in after-hours trading.19 By Friday they were down roughly 25% or more, according to CNBC.1 Benzinga said the stock was down 27.46%, at $66.79, at one point during the session.2 Finbold reported a 28% drop.6 Benzinga noted that Intel has had only one worse day in more than 50 years, on July 5, 1974, when it fell 29.9%. A drop of this size would erase roughly $125 billion in market value in one session.10

Part of the reason the fall was so sharp is how far the stock had already run. Investing.com said the shares were up about 150% year to date before the report.7 That left little room for a disappointment. Goldman Sachs said investor expectations had been "skewed positive" because of strength in server CPUs, momentum in advanced packaging and progress on Intel's foundry nodes.1

Did Intel beat on revenue? Depends on the consensus

Coverage differed on one point: whether third-quarter revenue beat or missed. Benzinga Pro's consensus was $16.47 billion, so Intel's $16.51 billion counted as a small beat.3 Investing.com, using a $16.48 billion estimate, called the beat about $20 million.13 MarketBeat used a $16.54 billion consensus and scored the quarter as a $24 million miss.12 KeyBanc's John Vinh put consensus at $16.6 billion and also called it a shortfall.2

The gap is too small to matter on its own. Its main use is showing that the top-line result was in line with expectations, not a standout. The real beat was on profit. Benzinga figured the EPS upside at about 30%.3 Northland said the beat came from higher gross margin and tight control of operating expenses.9

There was a smaller difference on the guidance itself. Seaport's Jay Goldberg quoted a 22-cent pro forma EPS guide against a 45-cent expectation.2 Intel's own release says 25 cents.11 The consensus figures used to measure the revenue shortfall also varied, from about $17 billion to $17.3 billion.1210 All of these readings point the same way.

The cause: PC demand fell apart

On the main cause, the coverage agrees: the PC business is shrinking fast. The client unit, now called the Client Computing and Physical AI Group, brought in $8.1 billion. That was down 5% from a year ago.14 It was also down 9% from the prior quarter and below Intel's own expectations.15 DA Davidson's Gil Luria said client revenue came in 9% below consensus. He blamed customers cutting inventory as end demand weakened.2

Intel's forecast is worse. Management expects client revenue to fall more than 20% from the third quarter, which KeyBanc said is more than $2 billion below expectations. Intel also expects the memory-driven PC correction to last at least through the first half of 2027.2 Cantor Fitzgerald's C.J. Muse calculated that, at current DRAM prices, the outlook implies PC unit shipments about 45% lower than a year earlier. He called that a meaningful surprise. Cantor also noted that customers only started cutting build plans in late August.10

UBS analyst Timothy Arcuri said the guide was below even the most bearish investor expectations. He sees no near-term relief for memory pricing or supply, especially with server demand for agentic AI absorbing so much memory. He also noted that Microsoft had made similar comments a night earlier.1

Data center growth, held back by supply

The frustrating part for Intel is that its main growth business is doing very well. Data Center and AI revenue reached $7.3 billion, up 78% from a year ago.14 It also grew 17% from the second quarter.15 Management said DCAI is on pace to finish 2026 nearly $10 billion above where expectations stood at the start of the year.13 Foundry revenue rose 58% to $6.7 billion.14

The problem is that Intel can't build enough server chips to make up for the PC slump. Cantor pointed to wafer and substrate shortages that are limiting server shipments.2 Baird lowered its target to $83 from $125. It does not expect meaningful relief on those constraints until the second half of 2027.6 Operations were also disrupted by an explosion at Intel's fab in Israel on October 14. KeyBanc said the incident cut about $300 million from fourth-quarter server revenue and about 200 basis points from gross margin.5

Several analysts argued the problem goes beyond bad luck. Seaport's Goldberg said he was not convinced that substrate shortages were the core issue. In his view, Intel is making too many client wafers for a PC market in its worst slump in more than a decade, and too few server CPUs for AI demand. He downgraded the stock to Neutral.2 Bernstein's Stacy Rasgon made a similar point. He said Intel still has too much PC capacity and too little server capacity a year into the current cycle. He also said the company once again did not see the turn coming. Rasgon cut his target to $75 from $110.1

This looks like the most important reading of the quarter. Demand is not Intel's problem. Its factories are set up for the wrong products. That is fixable, but slowly. Intel plans to raise capital spending significantly in 2027 and is investing in substrate suppliers to secure supply.9 Cantor also flagged guidance for negative free cash flow through 2027 and continued server share losses to AMD.2

The price target cuts

According to Finbold, 17 analysts lowered their forecasts in one day.6 Three firms downgraded the stock:

• Bank of America: Vivek Arya moved to Neutral from Buy and cut his target to $100 from $145. He cited weak external foundry traction and an expected 25–30% sequential drop in PC shipments.1
• Roth Capital: Suji Desilva also moved to Neutral and lowered his target to $70 from $120.3
• Freedom Broker: downgraded to Hold, mainly on valuation, with a $90 target.7

Most other firms kept their ratings but cut targets:

• UBS: $801
• Wells Fargo: $80 from $1201
• Barclays: $751
• Jefferies: $85 from $1206
• DA Davidson: $70 from $1002
• Rosenblatt: $70, keeping its Sell rating8

A few analysts stayed bullish. KeyBanc kept its Overweight rating with a $140 target, down from $155.5 Northland kept Outperform with a $93 target, down from $120.9 Evercore ISI kept an Outperform rating and a $133 target, citing strong server CPU demand.8 Before the selloff, Benzinga counted 10 Buy ratings, 22 Holds and one Sell among 33 analysts, with an average target of $100.10

The changes also reach beyond this quarter. Cantor cut its 2027 EPS estimate to $1.65 from $2.15, well below the $2.13 consensus.10

What it means

The overall picture is clear. Intel's turnaround is real in the data center business. Margins are improving, and the foundry losses are shrinking, with the foundry operating loss narrowing by $236 million from the prior quarter.17 But the stock had been priced as though the recovery was already done. One quarter exposed two weaknesses: Intel's capacity planning, and its heavy exposure to a PC market that higher memory prices are squeezing.

The sharpest criticism from analysts is that Intel was caught off guard. Barclays' Tom O'Malley said the PC environment got materially worse in just the last few weeks.1 Investors will likely watch two things from here: how quickly Intel can shift production toward server chips, and whether it can sign the external foundry customers that Bank of America says it still hasn't shown enough progress on.1 Until both improve, the 25% drop looks less like an overreaction and more like the market resetting its expectations for when the turnaround pays off.