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MajorMarket eventThu, Oct 292 min read
Rising memory costs and shortages are squeezing PC demand, limiting how much data-center growth can lift chipmakers' profits.
Intel reported third-quarter results after the U.S. market closed on October 29, 2026, with revenue of $16.5 billion, up 21% from a year earlier, and adjusted earnings of $0.52 per share, a measure that excludes certain accounting items.[1][2][3]
The company forecast fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of $0.25 per share, below analyst expectations of $17.29 billion and $0.45 cited in one report.[4] Finance chief David Zinsner said Intel expects the personal-computer, or PC, slowdown to continue at least through the first half of 2027; shares fell sharply in after-hours trading following the weak outlook.[5][2]
AI demand is squeezing the supply of chips needed for PCs; Intel management attributed the deteriorating PC market to higher memory prices, limited memory availability and tight corporate IT budgets.[6][7] Computer makers that absorb higher component costs face lower margins; passing the costs to buyers can make computers expensive enough to delay purchases, reducing orders for PC processors.[8][9] For chipmakers with their own factories, such as Intel, lower volumes also spread large fixed manufacturing costs across fewer products, adding pressure on profit.[10]
Server demand provides a separate source of support: Intel's third-quarter data-center revenue rose 78%, and operating income in that business roughly tripled.[11] But coverage also reported that Intel is struggling to produce enough AI server chips, so turning strong demand into sales depends on its ability to supply them.[12]
Computer makers such as Dell and HP face higher memory costs and weaker buying demand, forcing a choice between raising prices and accepting lower margins. Slower purchases also expose processor suppliers such as Intel and AMD, though the impact on each chipmaker may differ.[7][13][12][9]
Intel's 78% data-center revenue growth signals support for server-processor demand, including a useful demand signal for rivals. Suppliers still need to turn orders into shipments: Intel's production constraints show why demand growth may take time to become revenue.[11][12]
Memory suppliers such as Micron can benefit from higher selling prices, but Intel's warning exposes a counterweight: expensive memory can suppress computer sales and weaken purchases by PC customers. The net benefit depends on price gains relative to pressure on volumes.[14][7][9]