Intel warns of supply squeeze and cash-flow strain as shares plunge after hours

Intel shares dropped 23% in extended trading after the chipmaker warned that manufacturing constraints, a weak personal-computer market and an expensive capacity build-out would weigh on its finances. The company also offered a below-consensus revenue outlook for the December quarter.

Quarterly results beat estimates, but outlook disappoints

Intel reported third-quarter revenue of $16.51 billion, up 21% from a year earlier, while adjusted earnings were 52 cents per share. The figures were ahead of the analyst estimates cited by Reuters. Intel’s own release reported third-quarter revenue of $16.5 billion and non-GAAP earnings of 52 cents per share.

For the fourth quarter, Intel forecast revenue of $15 billion to $16 billion and adjusted earnings of 25 cents per share. Reuters said analysts’ average revenue estimate was $17.07 billion, with an expected 43 cents in adjusted earnings. Intel said PC-chip revenue was likely to fall in the mid-20% range during the quarter, following a 5% decline to $8.10 billion in the third quarter.

Supply problems meet stronger demand for data-center chips

Chief Executive Lip-Bu Tan said Intel had not been able to meet strong customer demand and cited manufacturing shortages, a severe memory crunch and softer PC demand. Intel’s official release said the company was working to expand supply for its Xeon processor family while facing near-term headwinds across the PC industry.

Reuters also reported that an October explosion at Intel’s Kiryat Gat, Israel, facility was expected to reduce revenue by roughly $600 million across two quarters and limit supplies of AI server chips to cloud customers. Those details were attributed to Intel interviews and media reports; the company’s earnings release reviewed for this article did not provide the same incident estimate.

Heavy investment keeps cash flow under pressure

Intel generated $5.1 billion in cash from operations during the third quarter, according to the company. But Chief Financial Officer David Zinsner told investors that Intel did not expect positive cash flow for the full year while it expands manufacturing capacity. Reuters reported that the company remains on track to spend about $20 billion in capital this year, with spending expected to rise sharply in 2027 as it buys additional chipmaking equipment.

Intel said the PC slowdown could continue at least through the first half of 2027. The company is simultaneously trying to improve execution, expand supply and advance its manufacturing roadmap, leaving investors to weigh longer-term recovery plans against immediate capacity and demand risks.

Sources

• Reuters: Intel signals slower growth, PC market remains under pressure
• Intel: Third-quarter 2026 financial results