What Could Go Wrong At Intel From Here?
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Intel (INTC) stock fell 29% on October 30, 2026. The drop came a day after management guided fourth-quarter revenue to $15 billion to $16 billion, below the $17.29 billion analysts had expected. Data center chips are not the weak spot, with management saying third-quarter revenue in that business grew nearly 80% from a year earlier. The trouble sits in the business Intel is best known for. So what is going wrong in Intel’s PC chip business, and who is raising it?
Intel Expects A Smaller PC Market Through 2027
Management raised the problem itself on the October 29 call, noting that memory shortages and limited IT budgets are cutting how many PCs people and companies buy. PC makers have been trimming their inventories to match those softer sales. Management expects that to last until memory supply and prices return to normal.
Management now expects industry PC unit sales to fall about 12% in 2026 and roughly 10% again in 2027. By Intel’s own forecast, that is a shrinking market for two years running.
The weakness sits in the PC market as a whole more than in Intel’s own products, according to management. Its AI PC revenue grew 35% from a year earlier in the third quarter, even as its client computing business as a whole shrank 5% over the same period.
How Big Is Intel’s PC Chip Business?
The client computing business is Intel’s largest. It generated $32.2 billion of revenue in fiscal 2025, nearly twice the $16.9 billion from the data center business. Its sales fell 3.4% that year after rising 3.2% in fiscal 2024, so the memory squeeze hits a business that was already shrinking.
The squeeze is getting sharper. Client computing revenue was $8.1 billion in the third quarter of fiscal 2026, down 9% from the quarter before. As Intel’s customers hold fewer weeks of inventory, management expects client computing revenue to fall again in the fourth quarter by more than 20% from the third.
The share price has already come down a long way. Intel closed on November 3 at 57.0% below its high of $140.94 from June 22, 2026. The stock now trades at 5.3 times its sales over the last twelve months, down from 10.5 at the end of September. That multiple is still well above the S&P 500’s 3.2. Intel lost $12.0 billion over those twelve months, making its price-to-earnings ratio not meaningful. The price appears to assume a harder stretch than it did in June, yet investors still pay more than the market average for each dollar of Intel’s sales.
How Worried Should Intel Holders Be?
Holders should treat the memory squeeze as a real risk that lands on Intel’s biggest business. By management’s own account, the problem will be slow to clear. When memory supply came up on the call, management said it is “not optimistic about next year in terms of memory” and will have to see in 2028 whether things improve.
Against that, management called 2027 a growth year for Intel and expects the data center momentum of the third quarter to continue. So the risk is a lasting one, and it sits in Intel’s largest business rather than across the whole company.
The measure to watch is revenue from Intel’s client computing business, which Intel is expected to report with its fourth-quarter results in January 2027.
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