Citi: Intel expects PC sales to fall another 10% in 2027, while server demand remains strong

How long will the PC market downturn last?

Intel management expects global PC shipments to decline 12% in 2026, including a year-over-year decline of more than 20% in the second half; this assessment is consistent with forecasts from Citi and the industry.
Management expects PC market shipments to fall another 10% in 2027. Price increases driven by memory will suppress demand, so the year-over-year decline is expected to be more pronounced in the first half; the outlook could improve in the second half as the comparison base changes.

Intel’s third-quarter 2026 revenue was slightly below Citi’s expectations, but margins and earnings per share were above expectations. Despite strength in the server business, PC demand headwinds and the impact of a fab-related incident still left the company’s guidance well below Citi’s expectations.
Server and PC demand are moving in contrasting directions: management expects server CPU shipments to grow more than 30% in both 2026 and 2027, with particularly strong demand for CPU-intensive, agentic rack-scale infrastructure.

HP recently said its 2027 planning assumption calls for a mid-single-digit percentage decline in the PC market; Intel expects a deeper decline of 10%. Citi therefore believes Intel’s new outlook is an additional negative for HP.
Citi believes HP’s cost cuts and measures to address commodity costs can partly offset PC headwinds, but a persistently weak PC environment, slow AI adoption and competition in the printing business will continue to weigh on its near-term valuation.

Citi believes Apple and Dell have greater exposure to relatively resilient areas such as high-end consumers and commercial markets, and have greater flexibility to redirect memory and component supplies toward stronger-demand markets such as high-end smartphones, servers and AI-driven storage infrastructure.
This relative advantage still depends on demand for their respective businesses: weakening smartphone demand would affect Apple’s growth; for Dell, a delayed PC replacement cycle and a slower-than-expected recovery in hardware demand would also create pressure.