Israel fab blast and PC slump: Intel shares tumble 21% after hours
Intel lifted quarterly revenue 21% to $16.5 billion, but its outlook disappointed: an accident at its Kiryat Gat plant and a memory crunch are weighing on the chipmaker.
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U.S. chipmaker Intel posted third-quarter 2026 revenue of $16.5 billion, up 21% from a year earlier. Growth was driven by its data center and AI business, which rose 78% to $7.3 billion. Its contract manufacturing arm, Intel Foundry, increased revenue 58% to $6.7 billion but remained deep in operating losses. Chief Executive Lip-Bu Tan said the immediate priority was to unlock additional supply to meet “extraordinary demand” for its Xeon family of server processors.
For the fourth quarter, Intel forecast revenue of only $15 billion to $16 billion, compared with an average analyst estimate of $17.07 billion. The outlook is weighed down in part by an explosion in October at its Kiryat Gat plant in Israel, which killed two people and seriously injured one, according to local media. The plant, which mainly makes data center chips on a 10-nanometer process, was shut for about two weeks; Intel expects to lose about $600 million in revenue over two quarters. “We're still assessing all of the wafers to see which ones are usable and which ones aren't,” Chief Financial Officer David Zinsner said.
Tan also cited a memory crunch and softer PC demand. Zinsner expects the PC slowdown to last through the first half of 2027, with PC chip revenue set to fall more than 20% in the fourth quarter. The shares dropped about 21% to around $72 in after-hours trading, and Nvidia, AMD, Micron and Arm also slipped. Intel does not expect positive free cash flow for now as it invests heavily in new manufacturing capacity.