Intel Data Centre Revenue Jumps 78% as PC Sales Slow

Intel’s data-centre business is pulling ahead even as its PC operation slows. The chipmaker reported third-quarter revenue of $16.5 billion, up 21% from a year earlier, with its Data Center and AI segment growing 78% to $7.3 billion. The Client Computing and Physical AI group, by contrast, fell 5% to $8.1 billion. The split captures where computing demand is moving, and why Intel’s recovery cannot be judged by laptop sales alone.

The company’s 29 October results release put GAAP earnings at $0.60 a share and non-GAAP earnings at $0.52. Intel said the quarter beat its guidance for revenue, margin and earnings, with its strongest data-centre revenue growth in 15 years. CEO Lip-Bu Tan cited robust demand for CPUs and said the immediate priority is to increase supply for the Xeon family. That is a more specific demand signal than a general claim that every part of Intel’s AI strategy is working.

AI infrastructure requires accelerators, but large systems also need conventional processors to coordinate work, move data and run services around the models. That helps explain why demand for Intel’s server CPUs can remain strong even while spending on personal computers weakens. Intel said its Data Center and AI segment generated $3.0 billion in operating income during the quarter. The figure is segment-level profit, not the company’s consolidated net income.

The PC side offers a warning against calling this an across-the-board rebound. The Client Computing and Physical AI group recorded lower revenue than a year earlier, and Intel expects the PC slowdown to continue at least through the first half of next year. Buyers delaying upgrades or choosing different configurations would not necessarily affect server demand in the same way. Intel therefore has two cycles to manage, not one.

Intel Foundry reported $6.7 billion in segment revenue, up 58%, but an operating loss of about $1.85 billion. Those sales include transactions with Intel’s own product groups, so they should not be added to group revenue as if they were all independent external orders. The loss is the sharper measure of how expensive it remains to build and operate the manufacturing capacity Intel hopes other chip designers will eventually use.

The company completed a $23 billion public equity offering to support its plans and balance sheet, according to the release. TechBooky covered the earlier upsizing of Intel’s share sale, when the financing was already becoming central to its chip comeback. The latest report shows both sides of that wager: stronger product demand and a foundry business that has yet to turn profitable.

For the fourth quarter, Intel guided to revenue of $15 billion to $16 billion, with non-GAAP earnings of $0.25 a share at the midpoint. That is guidance, not a result already earned. Investors will be watching whether server supply catches up with demand and whether manufacturing losses narrow as volumes and outside customers develop. For now, the company has a powerful data-centre growth story, but not a finished turnaround.