Intel Q3 2026: data center revenue up 78% to $7.3B, while client computing revenue fell 5%

Intel designs and sells x86 processors for PCs (its Client Computing and Physical AI Group, CCPG) and servers (Data Center and AI, DCAI), and runs Intel Foundry, which makes most of those chips and is trying to win outside customers. Foundry sells wafers to the product groups internally, so its revenue is mostly eliminated on consolidation, while its losses stay in the total.

Two accounting features make the headline numbers harder to read than usual. GAAP earnings swing each quarter with the value of Escrowed Shares, Intel stock held in escrow for release to the US Department of Commerce under its CHIPS Act Secure Enclave agreement and marked to market through interest and other income. And the year-ago quarter still contained Altera and a large gain on selling it. The sections below strip those out before looking at the products, the factories and the balance sheet.

Intel Q3 2026 results at a glance

$ millions, except per share and %	Q3 2026	Q2 2026	Q3 2025
Revenue	16,513	16,128	13,653
CCPG revenue	8,097	8,877	8,535
DCAI revenue	7,318	6,262	4,117
Intel Foundry revenue	6,697	5,765	4,235
GAAP gross margin	43.0%	40.4%	38.2%
GAAP operating income (loss)	2,522	1,796	683
Net income (loss) attributable to Intel	3,320	(11,033)	4,063
GAAP diluted EPS	$0.60	$(2.16)	$0.90
Non-GAAP diluted EPS	$0.52	$0.42	$0.23

Segment revenue includes intersegment sales, so the segment lines add up to more than total revenue; the eliminations were $6,291 million in Q3. The year-ago quarter includes Altera’s results through September 11, 2025; Intel’s sale of 51% of Altera closed on September 12, and the business was deconsolidated.

Q3 against July guidance, and a lower Q4 outlook

Q3 2026	Guided (July 23)	Reported
Revenue	$15.8–16.8 billion	$16.5 billion
GAAP gross margin	41.0%	43.0%
Non-GAAP gross margin	42.0%	44.1%
GAAP EPS	$0.31	$0.60
Non-GAAP EPS	$0.38	$0.52

Revenue landed inside the range, about $0.2 billion above its midpoint (our arithmetic); gross margin and both EPS measures came in above the guided figures. GAAP EPS overshot by more than non-GAAP because of a $1.0 billion gain on the Escrowed Shares, which the non-GAAP figures exclude; it is worth $0.17 of GAAP EPS. A year earlier the same line was a $1.7 billion loss, and the year-ago quarter also had a $5.45 billion gain from the Altera divestiture, which is why year-ago GAAP EPS of $0.90 is higher than this quarter’s.

The outlook steps down. Intel guided Q4 2026 revenue to $15.0–16.0 billion. The midpoint is about 6% below Q3’s revenue, and the range is about 10% to 17% above Q4 2025’s $13,674 million (our arithmetic). GAAP gross margin is guided to 37.1% and non-GAAP to 38.0%, both well below Q3, with GAAP EPS of $0.10 and non-GAAP EPS of $0.25. The GAAP tax rate is guided at 31%, against 11% non-GAAP.

Server prices did the work in DCAI

DCAI revenue rose 78% to $7,318 million, about 17% more than in Q2 (our arithmetic), and segment operating income more than tripled (our arithmetic) to $3,039 million, a margin of about 42% against about 23% a year earlier (our arithmetic). The 10-Q explains how. Server revenue rose $2.5 billion on average selling prices up 54%, mostly from a richer mix of premium products and to a lesser extent from demand-based pricing actions, partly to offset higher input costs. Server volume rose only 10%, driven by hyperscalers. The 10-Q adds that industry-wide supply constraints kept Intel from fully meeting demand for some products and that it expects this to extend into next year.

The CEO frames the priority the same way: unlocking supply for Xeon. Data center growth in Q3 was therefore mostly price and mix on constrained volume, not a large jump in units.

Client volume fell 14%

CCPG revenue fell 5% to $8,097 million and about 9% from Q2 (our arithmetic). Client revenue (notebook and desktop) was $6.9 billion; the 10-Q attributes the decline to a 14% drop in volume “due to lower demand and a competitive market environment,” partly offset by average selling prices up 9%. Segment operating income fell to $2,285 million, a margin of about 28% against about 32% a year earlier (our arithmetic). This is a change from the first half, when, per the 10-Q, client demand exceeded supply; in Q3 demand eased. In the release the CFO says he sees the PC slowdown continuing at least through the first half of next year.

Foundry lost $1.85B, less than a year ago

Intel Foundry revenue rose 58% to $6,697 million. Almost all of it is internal: intersegment revenue was $6.3 billion, driven by wafer volumes on Intel 18A, Intel 3 and Intel 4, and external revenue was $411 million, up $379 million from a year earlier, an increase the 10-Q attributes primarily to revenue recognized under a non-recurring foundry contract. The segment’s operating loss narrowed to $1,853 million from $2,321 million a year earlier and $2,089 million in Q2. Intel released its Intel 14A 0.9 process design kit in October.

$23B of new equity, and a much bigger share count

On August 12 Intel completed a public offering of about 242 million shares for gross proceeds of $23.0 billion; net proceeds were $22.6 billion, which the 10-Q says are for general corporate purposes including capex and working capital. Cash and short-term investments rose to about $54.0 billion at September 26 from about $37.4 billion at the end of 2025 (our arithmetic), against total debt of about $50.1 billion (our arithmetic: $46,317 million long-term plus $3,817 million short-term).

Diluted weighted shares were 5,307 million, about 17% more than a year earlier (our arithmetic), so per-share comparisons with last year are diluted by the larger share count. Q3 operating cash flow was $5,082 million and gross capex $4,219 million; adjusted free cash flow, Intel’s measure that also nets partner contributions, was $1,639 million. In Q2 it was negative $8,419 million, after a $12,216 million net outflow on partner contributions in that quarter; in April Intel paid $14.2 billion to buy back Apollo’s 49% stake in its Ireland fab venture.

What to watch in Q4

• DCAI supply. Server revenue grew on price with volume up 10%; whether added capacity lets volume grow faster is the next test of the data center story.
• PC volume. The 14% decline in client units is the swing factor in the step-down the outlook implies.
• Gross margin. The guide drops to 37.1% GAAP from 43.0%. The Q4 release should show how much is mix and how much is factory cost.
• Foundry losses and outside customers. Most of the year-on-year rise in external foundry revenue came from a non-recurring contract; recurring outside revenue is what would change the segment’s economics.
• Escrowed Shares. The mark-to-market line added $0.17 to GAAP EPS this quarter; for the nine months it was a $12.6 billion loss, per the 10-Q. Read GAAP and non-GAAP EPS together.

Quick answers

What was Intel’s revenue in Q3 2026?

$16,513 million, up 21% from $13,653 million a year earlier and inside the $15.8–16.8 billion range Intel guided to in July. Data Center and AI contributed $7,318 million, up 78%, and Client Computing and Physical AI $8,097 million, down 5%.

Why is Intel’s GAAP EPS different from non-GAAP in Q3 2026?

GAAP EPS of $0.60 includes a $1.0 billion gain ($0.17 a share) on Escrowed Shares tied to the US government agreement and a $0.06 gain on equity investments. Non-GAAP EPS of $0.52 removes those gains and adds back $0.11 of share-based compensation, among other smaller items.

What is Intel’s Q4 2026 guidance?

Revenue of $15.0–16.0 billion, GAAP gross margin of 37.1% (non-GAAP 38.0%), GAAP EPS of $0.10 and non-GAAP EPS of $0.25, with the margin and EPS outlook based on the revenue midpoint.

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Sources and method. The income statement, segment results, balance sheet, nine-month cash flow, GAAP to non-GAAP reconciliations, adjusted free cash flow, headline guidance comparisons and the Q4 2026 outlook are Intel’s own disclosures in Exhibit 99.1 to the Form 8-K filed 2026-10-29 (accession 0000050863-26-000188) for the quarter ended 2026-09-26, read directly from SEC EDGAR and linked above. The filing was accepted at 16:08 ET on 2026-10-29 (EDGAR filing index), after the US market closed; the release scheduled its webcast for 2 p.m. PT the same day. Segment revenue drivers, volumes and average selling prices, foundry external revenue, the share offering, the Escrowed Shares and the Ireland SCIP repurchase come from the Form 10-Q filed 2026-10-30 (accession 0000050863-26-000191). The Q3 outlook and Q2 comparatives come from the second-quarter release (accession 0000050863-26-000155), and Q4 2025 revenue from the fourth-quarter 2025 release (accession 0000050863-26-000009).

No consensus estimate is included, so this piece makes no claim that the quarter beat or missed expectations; the only comparisons are with Intel’s own guidance and with prior periods. This piece makes no claim about the share-price reaction.

Our arithmetic, labelled as such: revenue about $0.2 billion above the guidance midpoint ($16,513 million against $16,300 million); DCAI revenue up about 17% and CCPG revenue down about 9% from Q2; DCAI operating margins of about 42% and 23%, and CCPG margins of about 28% and 32% (segment operating income over segment revenue); cash and short-term investments of about $54.0 billion ($21,846 million + $32,159 million) and $37.4 billion ($14,265 million + $23,151 million); total debt of about $50.1 billion; diluted shares up about 17%; DCAI operating income more than tripled (3,039 against 964, about 3.2 times); and the Q4 outlook’s midpoint about 6% below Q3 and its range about 10% to 17% above Q4 2025. These are approximations built on the disclosed figures, not reported numbers. The 78%, 58%, 21%, 5%, 54%, 14%, 10% and 9% rates are as printed in the release or 10-Q. The interpretation — that data center growth came mostly from price and mix on constrained volume while PC demand weakened, and that GAAP earnings are distorted by the Escrowed Shares — is our analysis, not a company statement, and is not a forecast.

Related: TSMC Q3 2026, the largest contract chipmaker; AMD Q2 2026, Intel’s main x86 competitor in PCs and servers; and NVIDIA Q2 FY2027.