Intel Posts Strongest Revenue Growth in 15 Years, But Shares Drop ~8% on AI Spending Concerns
Intel delivered its strongest revenue growth in 15 years this quarter, with pro-forma gross margin topping 40% and pro-forma operating margin hitting 17% — the highest levels the company has seen since early 2022–2024. Despite the strong numbers, the stock swung sharply as investors weighed AI-related spending risks against the results.
Foundry Business Shows Progress, Still Posts a Loss
Intel's foundry revenue rose 31% year-over-year to $5.8 billion, with external foundry sales contributing $293 million (roughly 5%) of that total. Even with improved 18A wafer output and yields, the foundry segment posted an operating loss of about $2.1 billion, highlighting that profitability in this division remains a work in progress.
Roadmap: 18A-P and 14A Chip Production
Intel confirmed plans to begin 18A-P risk production and start 14A risk production in the second half of 2027, with large-volume 14A manufacturing targeted for 2028. The company also signed 10 long-term deals aimed at securing pricing and volume commitments as data center demand continues to outpace current supply.
Q3 Guidance and Stock Reaction
Intel projects Q3 revenue of $15.8–$16.8 billion and adjusted EPS of $0.38, citing supply constraints as demand for data center chips outstrips capacity. Despite the upbeat guidance, shares dropped roughly 8% after the results, as investors grew cautious about heavy AI infrastructure spending and uncertain near-term returns. In an earlier premarket session tied to the same results, INTC shares had briefly risen about 4%.
Analyst Price Targets Mixed After Q2
Following the earnings report, analysts revised their INTC price targets in a range of outlooks:
Stifel: $110
Mizuho: $109
Morgan Stanley: $84
Wedbush: $98
Rosenblatt: $80
JPMorgan: $85
Ratings across the board skewed mostly Neutral to Underweight, reflecting caution despite the headline revenue beat.
Why It Matters
Intel's results capture a common tension in today's market: strong fundamental growth colliding with investor anxiety over AI capital spending. For traders watching correlations between tech-sector earnings reactions and risk sentiment in crypto markets, this kind of volatile post-earnings move is a useful signal of how quickly sentiment can shift even on good numbers.
This article is for informational purposes only and does not constitute financial advice. Do your own research.
