Harsh Chauhan, The Motley Fool Mon, November 2, 2026 at 7:58 AM EST 6 min read INTC -28.58% NVDA -4.22% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Shares of Intel (NASDAQ:INTC) have been in phenomenal form on the stock market since the beginning of 2025, rising by 225% as of this writing, but Chipzilla's investors received a huge shock after the release of its third-quarter 2026 results on Oct. 29.
Intel stock plunged more than 28% the following day. Investors were spooked by the company's guidance, which was affected by the poor performance of its personal computer (PC) business. However, a closer look at Intel's numbers and guidance suggests that the stock is only taking a breather.
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Let's look at the reasons why this semiconductor stock could overcome this setback and soar once again.
Intel's Q4 revenue increased 21% year over year to $16.5 billion. Even better, its non-GAAP earnings per share jumped by an incredible 126% from the year-ago period to $0.52. Wall Street would have settled for $0.40 in adjusted earnings per share on revenue of $16.5 billion, suggesting that Intel's bottom-line performance was well ahead of expectations.
However, the company's guidance led investors to press the panic button. The company expects revenue of $15-$16 billion in the current quarter, along with adjusted earnings per share of $0.25. Analysts were anticipating $0.43 in earnings per share on $17.1 billion in revenue. So, it is easy to see why Intel stock was hammered badly following its results.
The primary reason behind Intel's poor outlook is the PC business. The company's client computing and physical artificial intelligence (AI) business segment saw revenue drop 5% from the year-ago period to $8.1 billion. Intel management noted on the earnings call that the pace of the PC market slowdown has accelerated over the past couple of months, driven by high component costs that are weighing on IT budgets.
Intel noted that it expects "the current environment to persist until memory availability and prices begin to normalize." This statement indicates that Intel's client computing business faces sustained pressure, especially given its expectation that the PC market will shrink by 10% in 2027. However, Intel's data center business is more than making up for the decline in PCs.
Its data center and AI (DCAI) segment revenue jumped 78% year over year to $7.3 billion, driven by solid demand for its server central processing units (CPUs) that handle inference and agentic AI workloads in data centers. Importantly, Intel's server CPUs are gaining popularity among customers, with Oracle deciding to deploy its next-generation Diamond Rapids platform to power its cloud infrastructure.
At the same time, Intel's custom AI processor business is also gaining solid traction. The company noted that this is its "fastest growing business segment, tripling over the last 3 years and poised to triple again over the next few years." As such, there is a strong chance that the robust performance of the DCAI business will enable Intel to offset the weakness of the PC segment until the latter stabilizes.
Market research firm IDC expects the PC market to start growing again from 2028, so the pain Intel is facing in this segment may not last beyond next year. Additionally, Intel notes that it expects stronger demand from data center customers and that the market for data center chips will remain tight on supply in both 2027 and 2028.
This should help Intel deliver strong earnings growth on the back of favorable pricing. In fact, the company's earnings are expected to jump once again in the current quarter despite the challenging PC environment. The midpoint of its Q4 revenue guidance implies a 13% jump from the year-ago period, along with an impressive 67% increase in earnings per share.
So, Intel continues to clock impressive earnings growth even though it isn't firing on all cylinders. Once the PC market starts recovering from 2028, I won't be surprised to see Intel's growth accelerating further.
If you're looking to construct a million-dollar portfolio and want to buy a top growth stock trading at an attractive valuation right now, Intel seems like an ideal candidate. That's because Intel trades at an attractive 31 times forward earnings, which isn't very expensive considering that the iShares Semiconductor ETF, which tracks the semiconductor sector, has a price-to-earnings (P/E) ratio of 46.
Moreover, analysts expect Intel's earnings growth to continue at a solid pace.
INTC EPS Estimates for Current Fiscal Year data by YCharts
Even better, the long-term earnings-per-share growth estimates for Intel are a handsome 75%.
As such, there is a strong likelihood that this AI stock will regain its mojo. Let's say Intel's earnings per share reach $3.14 in 2028 (based on YCharts estimates), and it trades at 40 times earnings; its stock price could jump to $126. That's 90% higher than Intel's price right now, suggesting that this beaten-down chipmaker could almost double in just over two years.
So, the recent slide in Intel seems like a golden opportunity for investors to buy a top stock that could make them significantly richer.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Oracle, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
Intel Stock Cratered 28%, Opening a Massive Buying Opportunity for Investors Looking for a Stock That Could Nearly Double was originally published by The Motley Fool
