Intel Expects PC Market to Shrink 12% in 2026; Dell Shares Close at $424.30
Key Facts
The decline came as Intel warned that the personal computer unit market would contract by about 12% in 2026. The company expects unit shipments to fall more than 20% in the second half of the year, before the market declines about 10% in 2027. Intel said it does not expect a sustained recovery until memory availability improves and prices begin returning to normal levels. The outlook puts pressure on the PC market at the forefront, while Dell’s performance is also supported by activity in AI servers.
Intel Chief Executive Lip-Bu Tan said the company was unable to meet strong customer demand during the quarter amid supply shortages, pressure from the memory crunch and weak PC demand. The company said in its filing that an industry-wide shortage of substrates, memory and other key components is expected to continue into next year. The scarcity of these components is limiting suppliers’ ability to meet demand, while Intel said higher memory prices are adding pressure to demand in other areas. On the earnings call, the company said: "We do not expect a sustained recovery until memory availability improves and prices begin to return to normal."
Intel’s third-quarter results showed a mixed picture of revenue growth and weakness in PC activity. Revenue reached $16.51 billion, up 21% year over year, while adjusted earnings were $0.52 per share, exceeding estimates of $0.40. By contrast, revenue from personal computer chips fell 5% to $8.10 billion in the third quarter. Intel forecast a decline in revenue from these chips in the mid-20s percent range in the fourth quarter. The company said desktop and laptop revenue was $6.9 billion, with sales volume down 14% from the year-earlier quarter, partly offset by a 9% increase in average selling prices.
Market pressure extended into the October 30 session, when the Nasdaq fell 2.9% and the S&P 500 declined 1.8%, according to The Associated Press. Intel shares also fell about 29% in their worst daily performance since 1974, closing at $65.76, according to EL7 data. The move places Dell shares within a broader selloff in technology stocks, but by itself does not prove that the PC market warning was the only factor behind their decline.
Dell’s latest results reflect the expansion of its business beyond personal computers, with strong performance in AI servers. The company reported record revenue of $47.0 billion in the second quarter of fiscal 2027, up 58% year over year, and diluted earnings per share of $6.34, up 273%. It recorded a record $60.9 billion in AI server orders and record revenue of $16.4 billion from them, and ended the quarter with a record backlog of $95 billion. By contrast, operating income for the Client Solutions segment, which includes commercial and consumer businesses, accounted for 19% of total operating income from reportable segments in the quarter ended July 31, 2026, compared with 35% in the year-earlier period ended August 1, 2025. This figure applies to the broader Client Solutions segment and does not measure PCs alone.
In its guidance for the third quarter of fiscal 2027, Dell forecast revenue of $49.0 billion, an expected year-over-year increase of 81%. Intel, meanwhile, said its fourth-quarter guidance includes an estimated impact from an incident at its Fab 28 plant of about $300 million on revenue and 200 basis points on gross margin. The company warned that weak PC demand could persist through the first half of 2027, alongside higher costs linked to rising memory prices. Intel said a return to a sustained recovery remains tied to improved memory availability and prices beginning to normalize.