$INTC · Schwab Network · 2026-10-30

Let's focus on the 1year chart for Intel. Shares had been up 150% so far in 2026. Entering today's session, those gains now have nearly been cut in half. Look at that decline off the back of what we've heard from Intel last night. We're down almost 30% on this stock.

So, let's talk about this reaction and exactly what we learned from this earnings report. Alex, just walk us through what they told us and some of the analysts reaction because we've seen a lot of price targets lowered here.

Yeah, no doubt. Uh Intel shares are getting absolutely crushed this morning, Sam. They're down nearly 30% and this is after a much weaker than expected outlook overshadowed what in some areas was a decently solid third quarter.

Big issue of course is the PC business. Intel sees fourth quarter revenue of 15 to6 billion, well below the 17 billion consensus uh with adjusted EPS of 25 cents versus the 43 cents that the street was expecting.

Gross margin guidance also came in well short of expectations.

But that's all despite some real strength in quarter 3 data center and AI revenue, which jumped 78%. And both earnings and margins beat expectations.

But client computing revenue fell 5% and Intel now expects this PC slowdown to continue at least through the first half of next year. There are supply issues as well, including constraints around uh data center uh products and a factory shutdown in Israel.

The street is uh responding relatively aggressively as one might expect uh based off this decline of you know in real time 27 a.5% Sam BFA and and Roth both downgraded Intel to neutral while Jeffre Wells Fargo City and countless others seemingly cut their price targets.

So the the concern though if we kind of summarize Sam isn't necessarily that there isn't AI demand that remains strong for Intel. It's whether that the data center momentum can offset a much sharper PC uh downturn and the near-term uh supply constraints around memory that are making it difficult to even capitalize on any demand that they're getting.

Right. Yeah. I mean it certainly seems like we are seeing investors expressing a a huge deal of disappointment in these numbers. Dan, I mean, this is such an interesting report because I mean just over a year ago, we were talking about this company, you know, Trump criticizing CEO Lip Boutan, calling for him to step down.

Then we saw this wave of support. I mean coming from Uncle Sam but also a number of companies. We saw the stock rallying what 150% or so year to date into this print nearly having that.

Now how would you approach an example trade on this one? Yeah Sam I mean this is obviously a very painful day and resetting expectations and you know I think the uh the jury is still out on how this is going to unfold over the next month or so but uh I do think there's opportunity here.

We're still seeing a pretty lofty implied VSS even after the earnings announcement. So today's trade example is to try to capture potentially a zone lower but in ultimately with the option to get put in the stock I think at a level where around 55 there's more support.

So today's trade example is buying a put spread in December. Buying the 65 puts selling two 60 puts. Uh that can be done for about a dollar credit right now. So, you can get paid to put this trade on.

At the same time, it buys some time and see how this unfolds. If we see weakness and it gets below that 60 strike, you're actually going to get put in around $55. So, that's a better entry level, I think, for maybe a longer term hold.

And again, I don't think at this point it's something that you want to jump in front of this falling knife effectively. So, I think this gives a little time to digest the situation and also have an opportunity to maybe pick up the stock at a much better level.