Intel shares drop on weak Q4 forecast despite AI data center surge

Intel shares plunged in extended trading Thursday after Intel issued a weak fourth-quarter forecast, citing continued softness in the global PC market, despite beating third-quarter earnings expectations. Intel reported adjusted earnings per share of 52 cents versus 40 cents expected, and revenue of $16.51 billion, slightly above estimates. However, client computing revenue fell 5% year-over-year to $8.1 billion, missing forecasts, while data center and AI revenue surged 78% to $7.3 billion. The company forecast fourth-quarter adjusted EPS of 25 cents on revenue between $15 billion and $16 billion, far below analyst expectations of 43 cents and $17.1 billion. Intel's forecast also reflects a $600 million revenue hit from a fatal fab explosion in Israel. Despite a 150% stock gain this year, shares have dropped 23% in October amid AI buildout concerns. The company remains the only U.S. advanced logic chip manufacturer, with its 18A chip in high-volume production, though it lacks major external customers.