Intel flagged that the PC market would decline 12% in 2026 and 10% next year.

  • Morningstar said the PC business accounts for up to 60% of the company’s total revenue.
  • Manufacturing constraints in server CPUs and substrates, together with the PC market weakness, could limit the segment’s near-term growth potential, Morningstar said.
  • Intel’s Q4 forecasts were below market expectations.

Intel Corp. (INTC) shares plunged over 26% in premarket trading on Friday after it issued a weak forecast and flagged persistent PC market weakness, which could pressure its core CPU business.

Morningstar said in a new report that the weakness stunts the overall outlook. “$INTC Despite the focus on AI and Intel’s manufacturing (Foundry) business, its PC business still accounts for 50%-60% of revenue in a normal quarter. Intel doesn’t expect the memory crunch to abate soon (nor do we). Intel forecasts total revenue growth in 2027, but PC softness will stunt it,” it wrote.

Morningstar said it is encouraged by demand for Intel’s server CPUs and agentic AI, noting that data center revenue rose 17% sequentially and 78% year over year. However, manufacturing constraints in server CPUs and substrates could limit the segment’s near-term growth potential.

Morningstar lowered its fair value estimate for INTC to $85 from $105, implying a nearly 8% drop from the stock’s previous close.

Intel’s Q3 Earnings Recap

For the fourth quarter, Intel expects revenue to range between $15 billion and $16 billion, falling significantly short of analysts’ expectation of $17 billion. It forecasts adjusted earnings of $0.25 per share, also below the expected $0.43.

Additionally, Intel expects its gross margin to narrow to 38%, down from 43% in the third quarter.

Revenue in the bygone third quarter rose 21% to $16.5 billion, in line with expectations, while adjusted profit of $0.52 per share surpassed the $0.41 target.

The chipmaker projected that the PC market slump will persist through at least the first half of 2027, with shipments declining 10% next year after a 12% slide in 2026.

Retail View On INTC

INTC was the top trending ticker on Stockwits at the time of writing, with a ‘bullish’ retail sentiment.

A trader wrote: “$INTC This will obviously rip violently to the upside at open tomorrow, RSI is slammed, this has been a huge over reaction and a major gap in the chart has been filled. After Hours and Pre market prices are always horseshit cause its such low volume and most funds and people worldwide aren't trading in those hours.”

Several traders said they bought the stock on the dip. As of the last close, INTC stock had gained 150% year to date.

 

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