Intel $INTC is up 5.6% after earnings!

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Intel $INTC is up 5.6% after earnings! The quarterly report features the fastest revenue growth in 15 years.

Remember when Intel was written off last year as a company that missed the AI revolution and whose foundry business was a bottomless money pit? Tonight came the answer. Shares of $INTC jumped more than 12% in after-hours to around $112 and were up more than 170% since the start of 2026. Now they're a bit lower.

Numbers that crushed expectations

Revenue for the second quarter of 2026 reached $16.1 billion, up 25% year-over-year, while the market expected just $14.42 billion. According to CEO Lip-Bu Tan, it's the strongest revenue growth in more than 15 years. Adjusted earnings per share were $0.42, double the estimated $0.21.

Gross margin (GAAP) improved year-over-year from 27.5% to 40.4%, non-GAAP even to 41.8%.

Where did the growth come from?

The datacenter and AI segment grew 59% year-over-year to $6.3 billion. The foundry business added 31% to $5.8 billion, and the client division grew 13% to $8.9 billion.

While going through the entire report, I found that Intel is beginning to enter into long-term contracts with clients for server processors, some with fixed prices. We know this mainly from the memory market, where manufacturers want to lock in current high prices in case sentiment turns. So it's great for the company.

One big BUT in accounting

The company reported an accounting loss of $11 billion, or $2.16 per share. However, the vast majority consists of a one-time non-cash item of $12.5 billion, a revaluation of so-called Escrowed Shares tied to the agreement with the US government under the CHIPS Act. Paradoxically, the more the shares rise, the larger this accounting loss.

Investments are also a problem for investors. Adjusted free cash flow was negative $8.4 billion because, according to the CFO, Intel is significantly increasing investments in equipment, factories, and substrates to meet expected growth this year and next.

Intel raises outlook

For the third quarter, the company expects revenue of $15.8 to 16.8 billion and adjusted earnings of $0.38 per share, while analysts were counting on revenue of $15.1 billion and earnings of $0.27. So the guidance beat estimates nearly as significantly as the results themselves.

Do you hold $INTC or did you write the company off when it was trading below $20?

Victor Nettoyeur @victor_nettoyeur 9h

"Remember how just last year Intel was written about as the company that missed the AI revolution and whose foundry business is a bottomless money pit?"

Yeah I remember that and I wouldn't say anything has changed ;)

The foundry business still has no customers and is losing money, all revenues are resold HW within INTC.

People completely ignore that not so long ago this company had over $5 EPS, nowadays they're happy with a few cents in the black.

If it weren't for the government, the competition wouldn't even talk to them, no Apple, AMD or Nvidia. This is pure politics, not Intel's technological progress.

The fact that they even managed to close the gap with TSMC in the most advanced nodes is a miracle, in which ASML also has a big share.

But that doesn't change the fact that their capacity and yields are insufficient for most of the major players.

They have a big plus in advanced packaging, where they could be an interesting alternative, but that's about it.

Their current valuation is pure speculation on the 2030 period and beyond. If there's an AI bubble being inflated somewhere, it's precisely on INTC, which would lose most of the valuation it has gained in the last 12 months if it bursts.

Vojtěch Šplíchal @vojtechsplichal 14h

Honestly, I had also written off the company, similar to $NOK, which has risen significantly in recent months. But the results showed that the company is growing again thanks to AI and knows how to adapt. In my opinion, the negative cash flow plays a big role in the stock decline after earnings reports. Many investors, especially retail, see it as a bad thing and sell off the stock.

⌘ K

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