Great numbers are no longer enough | Future Intelligence #19

The past week showed how nervous the market has become about the return on AI investments. On Thursday, Intel reported its fastest revenue growth in fifteen years and yet plunged by double digits, because investors were spooked by yet another increase in capital expenditures. At the same time, private capital led by BlackRock completed a record forty-billion-dollar acquisition of data center company Aligned, showing that not all investors share the same nervousness.

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Intel crushed estimates. The market punished it anyway

On Thursday, Intel reported results that should have been a celebration of a comeback. Instead, they became a textbook example of how little good numbers matter to the market today if it doesn’t see a clear path to profit behind them.

What happened

Intel reported revenue of 16.1 billion dollars, significantly above the estimate of 14.3 to 14.4 billion dollars, thus recording its fastest year-over-year revenue growth in more than fifteen years, specifically 25%. Adjusted earnings per share reached 42 cents, double the expected 21 cents. The Data Center and AI division grew by 59% to 6.3 billion dollars and the foundry segment, meaning custom chip manufacturing for other companies, strengthened by 31% to 5.8 billion dollars. However, under GAAP standards, the company reported a loss of 11 billion dollars, or 2.16 dollars per share, caused mainly by non-cash write-downs.

The stock briefly jumped by more than 8% on Thursday evening after the release. On Friday, however, sentiment turned and Intel eventually closed with a loss of 7.89% at 92.32 dollars, while during the day it fell below the psychological 100-dollar mark. Trading volume reached 179 million shares, roughly 36% more than the three-month average.

Why it’s a paradox

The reversal was caused by a single number: Intel raised its capital expenditure outlook for 2026 from 18 billion to more than 20 billion dollars and CFO Dave Zinsner indicated that the volume of investments in 2027 will be “significantly higher” than this year. That’s what sent the stock down, because investors suddenly realized that the record revenue growth rests on even more rapidly growing costs.

The second problem is the demand question at the foundry division. Although revenue from its own chip manufacturing is growing, the market is asking how much of that comes from external customers and how much is just Intel making chips for itself. While the company two days before results announced its first-ever named external foundry customer, which briefly shot the stock up by more than 8%, the question of whether enough such customers will appear to justify the billions in investments remains open.