$INTC · Schwab Network · 2026-10-29

Well, if we think Amazon's 9% drop was a big drop, then I want to look at Intel because their shares are now down 22% since these numbers came out.

EPS for the third quarter came in at 52 cents. This is better than expected, as expectations were around 40 cents. Revenue of $16.5 billion was up 21% from last year, but it missed the target by a narrow margin.

To be precise, it stands at $16.51 billion. Since the team was expecting $16.54 billion.

Consolidated margin for the third quarter was 44.1%, slightly higher than the forecast of 42.1%. Consolidated operating margin was 19.6%, which is about 3% better than the forecast of 16.5%.

Data center and AI revenue stood at $7.32 billion. This is better than expected.

Client computing revenue is $8.1 billion. It missed the target by a pretty big margin. Market analysts were expecting $8.82 billion in client computing revenue.

However, foundry revenue of $6.7 billion exceeded the consensus of $6.12 billion. And their free cash flow was $1.64 billion , which is much lower than the $2.98 billion , but they are still in a positive position in free cash flow.

Speaking of guidance , revenue guidance of $15 to $16 billion is lower than forecast, while $17 billion was expected. That's less than a billion dollars. EPS guidance of 25 cents missed expectations of 43 cents and adjusted gross margin guidance of 38% was lower than the 42.8% forecast.

So, it's basically a guidance issue, where all the numbers for the next quarter are far from the target.

Intel also says it expects the PC sector slowdown to continue through the first half of 2027 and is optimistic about its broader portfolio. They are also taking note of news of a fire at one of their factories in Israel, which has hit their server chip supply and has had some impact on results.

So per kg, I mean , 22% price drop. I think a fluctuation of about 7 percent was expected here. So, you know, we're in three times that situation now. Is this purely for guidance, or do you have any other warning signs ?

Yes, no, it's entirely a matter of direction. And you're starting to question whether we're seeing another problem from this , you know, the situation is getting worse for these companies.

Look, they're clearly putting some of the blame on that factory in Israel. Let's give some context to this. They said it would impact their revenue forecast by as much as $300 million in the fourth quarter.

And you're looking at a margin impact of 200 basis points, so that's about 2 percent. However, unfortunately this does not fill the gap in guidance we see.

So, the fabrication and AI stuff is looking very good, but unfortunately they still need to scale it up. Their main source of income is still their client solutions business, such as PCs and such.

That is still relatively weak and contrary to the narrative of other companies that have participation in this sector, such as Texas Instruments.

This is a popular name. There is obviously a lot of hype or excitement around it. We know that the US government is trying to help. We know Elon Musk and some other people are trying to make deals with this company , but they still have a long way to go in terms of factories.

And unfortunately, they are failing to achieve their targets when it comes to guidance.

I am not satisfied with any of the CFO's explanations, even if they exclude them from what I see, it is a bad margin. And that's why you will now see the share price fall by 15-17 percent.

You might hear a new customer announcement on a conference call. That can make everything right again. We have seen such situations in the past. This could happen this time too.

Simply put, this is not a good report at all. I'm not very optimistic about this earnings season , friends. I don't know what you're thinking , but this doesn't look very good.

Intel is still down about 17%