Intel Data Center and AI Revenue Rises 78% to $7.3 Billion
Key Facts
Intel reported Data Center and AI revenue of $7.3 billion in the third quarter of 2026, up 78% year over year, marking the company’s strongest data center revenue growth in 15 years, Chief Financial Officer David Zinsner said. Total revenue was $16.5 billion, up 21% from the same period a year earlier. Zinsner said revenue, gross margin and earnings per share exceeded the company’s previous guidance. The results reflect a larger contribution from data center operations, while revenue from the Client Computing segment and core PC products declined. The company said demand for data center products remained strong as investment in AI infrastructure continued.
The disclosure shows that Data Center and AI revenue increased by $3.2 billion compared with the third quarter of 2025, while revenue from the Client Computing segment and core PC products fell by $438 million. Intel attributed a $2.5 billion year-over-year increase in server revenue to a 54% rise in average selling prices and a 10% increase in unit volume. The company also pointed to growing demand from hyperscale cloud providers. The figures show that server business expansion came from both pricing and volume, while performance remained uneven across the company’s operations. Zinsner described data center revenue growth as the company’s strongest in 15 years.
Gross margin under generally accepted accounting principles rose to 43.0% in the third quarter from 38.2% a year earlier, while the non-GAAP gross margin was 44.1%. In its results statement, the company said revenue, gross margin and earnings per share exceeded its previous guidance, without setting a long-term gross margin target in the disclosure. Intel said industry-wide supply constraints affected its ability to meet all demand for some products during the quarter. The company expects these constraints to persist through next year. As a result, demand growth is constrained by the company’s ability to convert it into shipments that meet customer needs.
Intel forecast fourth-quarter 2026 revenue of between $15.0 billion and $16.0 billion, and non-GAAP earnings per share of $0.25. It said strong demand for data center products is expected to continue in the fourth quarter and beyond. But Zinsner said the slowdown in the PC market would continue at least through the first half of 2027, as the company keeps investing to increase supply. In trading, Reuters reported that Intel shares fell about 30% in the session on Friday, October 30, and were on track for their biggest one-day decline in history. The stock closed at $65.76 that day, according to EL7 data.