Intel's Data Center Revenue Jumps 78% as PC Slump Hits Forecast

Intel's Data Center and AI group reported revenue of $7.3 billion for the third quarter, up 78% from a year earlier, while its PC chip business, the Client Computing and Physical AI Group, fell 5% to $8.1 billion. Total revenue rose 21% to $16.5 billion, Intel said on October 29.

The split shows where AI demand is reaching beyond GPUs. Intel is pitching its server CPUs for agentic AI, the workloads where processors coordinate tools and tasks, and Chief Executive Lip-Bu Tan said Intel's immediate priority is unlocking more supply to meet what he called extraordinary demand for its Xeon processors.

CFO David Zinsner said the quarter delivered Intel's strongest data center revenue growth in 15 years. For comparison, the unit's revenue was $6.26 billion in the second quarter, Reuters reported.

The outlook pulled the other way. Intel forecast fourth-quarter revenue of $15.0 billion to $16.0 billion, with gross margin falling to 37.1%, from 43.0% in the third quarter. Analysts had expected $17.1 billion in revenue and adjusted earnings of 43 cents a share, according to LSEG data cited by CNBC, against the 25 cents Intel guided. Intel shares fell 20% in extended trading, CNBC reported.

We see the PC slowdown continuing at least through the first half of next year,

Zinsner said inIntel's earnings release.

Third-quarter revenue was in line with the $16.50 billion analysts expected, Reuters reported, while PC chip revenue missed the $8.98 billion forecast. Intel expects that unit's revenue to fall more than 20% from the third quarter to the fourth.

Intel also used the quarter to push its AI hardware roadmap. At Hot Chips 2026, it showed three architectures for agentic AI and enterprise workloads: its next-generation Xeon, code-named Diamond Rapids, for orchestration; its new GPU D-series for inference; and Core Series 3 for client and edge devices, as detailed in itsearnings presentation. It also demonstrated day-zero support for Meta's Muse Spark Open on its upcoming GPU D-series and Xeon platforms.

The release does not say how much of the data center growth comes from AI workloads specifically, which customers drove it, or when supply will catch up with demand. It also gives no pricing or shipping date for the GPU D-series.

Intel Foundry revenue rose 58% to $6.7 billion, and the company completed a $23 billion public equity offering during the period. Intel had 81,100 employees at the end of September, down from 88,400 a year earlier, according to its quarterly filing. The results came in the same week Microsoft reported 48% Azure growth and Amazon reported 39% AWS growth, as AI Briefing News reported.