Investors are watching Intel (NASDAQ: INTC | INTC Price Prediction) ahead of second-quarter results due after Thursday’s close. Shares have run 185.77% year to date and 353.35% over the past year, but sit 21.3% below the June high.
An AI Rerating Meets a Reality Check
The setup this quarter is loaded. Last quarter, Intel posted non-GAAP EPS of $0.29 on revenue of $13.577 billion, a 7.18% year-over-year gain and the sixth straight quarter of revenue above expectations. Data Center and AI revenue jumped 22% to $5.052 billion, and Foundry grew 16% to $5.421 billion.
CEO Lip-Bu Tan told analysts that “the CPU is reinserting itself as the indispensable foundation of the AI era”, with the CPU-to-GPU ratio in inference workloads shifting from 1-to-8 toward 1-to-4. Analysts now expect the fastest quarterly revenue growth in about six years, driven by CPUs increasingly used to power AI agents.
Consensus Estimates Snapshot
| Metric | Q2 2026 Guidance | Q2 2025 Actual |
|---|---|---|
| Revenue | $13.8B to $14.8B | $12.859B |
| Non-GAAP EPS | $0.20 | $(0.10) |
| Non-GAAP Gross Margin | ~39.0% | n/a |
| DCAI Revenue (Street est.) | $5.37B (+36.4% YoY) | $3.939B |
Margins, Apple, and the PC Question
I’ll be watching three things closely. First, gross margin. TD Cowen analysts flagged that adjusted gross margin is expected around 38.8%, still pressured by heavy foundry investments and the costs of ramping new manufacturing processes. Any push above 41% would validate the operational leverage story.
Second, the Apple (NASDAQ:AAPL) angle. President Trump announced a potential deal in April for Intel to manufacture processors for Apple, though neither company has confirmed it. Any acknowledgment on the call would be a foundry watershed. Prediction markets already assign a 52% probability that Foundry revenue tops $6 billion.
Third, the PC drag. Management is “prudently planning for PC demand to weaken in the second half”, with full-year PC unit TAM expected down low double digits. Client Computing grew just 1% last quarter, and you should look at whether that line stalls further while data center accelerates.
Options positioning suggests measured optimism, with a full-chain put/call ratio of 0.62, and Polymarket traders assign an 87.5% probability Intel beats.
The Quarter That Decides the Rerating
Intel’s stock has already priced in a lot. With shares at $105.84 and the analyst target sitting at $106.70, this earnings report needs to justify the rerating. If DCAI clears $5.4 billion and Foundry margins improve, the AI-CPU thesis holds. If PC weakness bleeds into guidance, the pullback from June’s high starts looking like the start of something bigger.
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