Is There A Risk Hiding In Intel Stock’s Sales Mix?

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Intel (INTC) still sells more chips for PCs than for anything else. The PC chip business brought in $8.1 billion in fiscal Q3 2026, compared with $7.3 billion for its data center chips. Management now expects PC chip sales to drop more than 20% in the fourth quarter from the third, meaning the company’s largest business is shrinking fast. Intel stock fell 29% on October 30, the day after that guidance came out. So why are Intel’s PC chip sales falling?

PC Makers Are Buying Fewer Chips From Intel

Management said on the fiscal Q3 2026 call that memory shortages and limited IT budgets are hurting PC demand across the industry. PC buyers have also paid sharply higher prices in 2026. Late in the quarter, PC makers ordered fewer chips as they worked down inventory.

The fall so far is mild against a year earlier, with PC chip revenue down 5% while Intel’s total revenue grew 20.9%. Management expects the PC market to keep shrinking, however. It sees the number of PCs sold falling about 12% in 2026 and is planning for a further drop of roughly 10% in 2027, with no sustained recovery until memory supply improves and prices settle.

Intel Expects Lower Margins As PC Chip Sales Fall

Management said the PC business earned $2.3 billion of operating profit in fiscal Q3, or 28% of its revenue. Management guided fourth-quarter adjusted gross margin to 38%, down from an adjusted 44.1% in the third quarter. It said the drop comes mainly from lower revenue against a fixed cost base as Intel cuts the PC wafers it starts, and that about 2 percentage points of the margin hit comes from the accident at Fab 28, its Israel factory. Almost all of the Fab 28 sales impact falls on its 10-nanometer server chips, not its PC chips, according to the call. Management said the accident led to an extended shutdown at the facility. For a holder, that means a PC slump reaches Intel’s margin, not only its sales.

Intel Stock Has Nearly Halved In A Month

Intel stock lost 47.4% between October 8 and November 6, 2026, while the S&P 500 fell 4.9%. Over the full twelve months to November 6, the shares are still up 46.6%, against 9.8% for the index.

Intel trades at 4.9 times sales, against 3.1 for the S&P 500. Even after the fall, the shares still trade at a premium to the index.

Newer PC Chips Are Still Selling Well For Intel

PC makers working down inventory account for part of the PC drop, and management expects that correction to last at least into the first quarter of 2027. After that, management expects Intel’s sales to move back in line with what PC buyers actually purchase.

Intel’s newest PC chips are performing better than the broader business. AI PC revenue grew 35% from a year earlier, even as total PC chip revenue fell. Management also expects Nova Lake, its next PC chip, to win twice as many designs at launch as Panther Lake did. Meanwhile, the data center business grew nearly 80% from a year earlier. Management said demand for those chips still exceeds what Intel can supply.

That leaves holders with a reason for measured concern rather than alarm. The PC slump is industry-wide and set to run into 2027, while sales of Intel’s newest PC chips and its data center chips are growing. Better memory supply would ease the worry, but management said it is not optimistic about memory in 2027. Intel is expected to report its fiscal Q4 2026 results in January 2027, and PC chip revenue is the number to watch.

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