In gentoo, everything gets updated via portage using "emerge". For the kernel, emerge only updates the source. You have to manually configure, compile, and install the kernel source into a kernel binary. This is to allow you to keep your kernel tuned for your machine.

Gentoo installs the source here:

/usr/src/linux-#kernelversion#-gentoo-#gentooreleaseversion#

Because I have defined the "symlink" USE flag for gentoo-sources in /etc/portage/package.use, it will also symlink the latest downloaded source (whether you want it to or not) to:

/usr/src/linux

So once you emerge a new kernel source, you ought to install it or change the symlink if you don't have the time to do the kernel install.

Steps To Install Kernel

emerge sys-kernel/gentoo-sources
cd /usr/src/linux
make menuconfig (and configure your kernel)
make