What Is Going On With Intel Stock After Its Earnings Call?

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The past month has been painful for Intel (INTC) shareholders. The stock lost 37.6% from October 14 to November 12, compared with a 1.6% slip for the S&P 500. The sharpest drop occurred on October 30, when shares fell 28.6% the day after the company’s fiscal Q3 2026 earnings call. On that call, management forecast lower fourth-quarter revenue, even though Intel’s data center chips had just posted their fastest growth in 15 years. So which part of Intel is shrinking?

Intel’s PC Chip Sales Shrink As Server Sales Grow

The contraction is happening in Intel’s PC chip business. Segment revenue fell 9% from the prior quarter to $8.1 billion in fiscal Q3 2026. Management expects that figure to fall by more than 20% from there in the fourth quarter, adding that its customers are reducing inventory quickly. Higher memory prices and limited IT budgets are hurting PC sales across the industry, management said, and the company is planning for industry PC unit sales to fall roughly 10% in 2027.

Intel’s data center chips are moving the other way. Their revenue was $7.3 billion in the third quarter, up nearly 80% from a year earlier, and management said demand still exceeds supply. Management expects data center revenue to grow quarter over quarter by a mid-teens percentage in the fourth quarter, even though an accident at its Fab 28 factory in Israel will cost about $300 million of revenue in that quarter, almost all of it in server products. So the weaker fourth quarter comes from PCs, while the server business is still expected to grow.

Will Intel Make Cash While It Spends To Grow?

By management’s own account, probably not in 2027. On the October 29 call, management called 2027 an investment year, probably without positive free cash flow, as Intel ramps Intel 18A and prepares Intel 14A to begin production in 2028. Gross capital spending is on track for $20 billion in 2026, and management expects it to be up strongly in 2027. Intel ended September with $54.0 billion of cash and short-term investments against $50.1 billion of debt.

The business is more profitable than it was a year ago, but less so than the market as a whole. Over the twelve months to September, Intel kept 10.1% of its sales as operating profit, against 19.0% for the S&P 500. A year earlier, its operating margin was slightly below zero.

Buyers still pay up for Intel’s sales: the stock trades at 5.4 times sales, against 3.2 for the S&P 500. A price-to-earnings ratio is not meaningful, because Intel posted a net loss over those twelve months, driven by an $11.0 billion loss in fiscal Q2 2026. In that quarter, Intel still made an operating profit of $1.97 billion, so the loss came from items below operating profit. Buyers paying that price appear to be counting on data center growth lasting through the spending years, and management expects the industry to stay short of supply throughout 2027 and into 2028.

How Far Has Intel Stock Fallen In Market Shocks?

Intel stock has usually fallen further than the S&P 500 when markets were shaken. In the 2022 inflation shock, it fell 52%, against 25% for the index. In the 2024 yen shock, the stock dropped 45%, including a 26% one-day drop on August 2 after Intel’s own earnings report, while the index fell 7.8%. The stock fell 30% in the 2025 US tariff shock, against 19% for the index. The exception was the 2023 yield shock, when Intel fell 4.3% and the index fell 9.9%.

If you own Intel or are thinking of buying, you would want the server demand management described to hold, with data center growth large enough to outweigh a PC slump management expects to last through 2027. Intel is expected to report fiscal Q4 2026 results in January 2027, and data center revenue set against PC chip revenue is the pair to watch.

Does This Mean You Should Act On INTC?

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