Quick summary
- Intel shares rose nearly 24% on Friday after a huge first-quarter earnings surprise
- Adjusted EPS came in at $0.29 versus a modest Wall Street forecast of $0.01. Total revenue was $13.6 billion compared to consensus of $12.36 billion
- The data center and artificial intelligence division generated revenue of $5.1 billion, beating analysts’ expectations of $4.41 billion.
- Forward guidance for Q2 revenue of $13.8 billion-$14.8 billion significantly beat Street estimates of $13.03 billion
- Citigroup upgraded Intel to strong buy status; Several Wall Street firms increased their price targets after earnings
Intel achieved results that completely surprised Wall Street. The semiconductor giant reported adjusted earnings of $0.29 per share, demolishing the slim consensus estimate of $0.01 — representing a stunning win of $0.28. Total revenue was $13.6 billion, significantly beating analysts’ expectations of $12.36 billion.
This marks the sixth consecutive quarter in which Intel has exceeded its revenue expectations, which CEO Lip Bo Tan attributed to a “deliberate reset” in the company’s operational approach.
Shares ended Friday’s session at $82.54, representing a remarkable 23.6% gain in one day. The closing price puts the stock near its 52-week high of $85.22, a significant rebound from its yearly low of $18.97.
Intel The Data Center and Artificial Intelligence division emerged as the clear winner. The segment generated revenue of $5.1 billion, significantly exceeding Wall Street expectations of $4.41 billion. The company’s leadership described the demand for CPUs for AI applications as “unprecedented.”
CPU thesis for artificial intelligence agent
Intel’s position is clear and focused. While GPUs dominate the training and execution of AI models, the actual tasks performed by AI agents — such as navigating the web, retrieving data, and executing workflows — rely heavily on central processing units (CPUs). This represents Intel Core strength.
“The next wave of AI will bring intelligence closer to the end user, moving from basic models to inference to effectiveness,” Tan explained.
The client computing division, which includes computer processors, also exceeded expectations. Revenue came in at $7.7 billion versus expectations of $7.1 billion – despite IDC forecasting an 11.3% contraction in the global PC market for 2026.
Expectations for the second quarter ranged between $13.8 billion and $14.8 billion. Analysts had previously estimated $13.03 billion. Intel also expected second-quarter earnings per share to reach $0.20, beating the current full-year analyst consensus of $0.08.
Key Partnership Announcements
Intel secured several important contracts during the first quarter. The company will collaborate with Elon Musk on the upcoming Terafab project, to manufacture chips for SpaceX, xAI, and Tesla. Tesla’s choice of Intel’s 14A manufacturing process represents a major validation of its foundry operations.
In addition, Intel announced an expanded partnership with Google, with Xeon processors dedicated to supporting and reasoning across AI applications. Google Cloud infrastructure.
In a strategic deal, Intel announced plans to reacquire a 49% ownership stake in a manufacturing plant previously sold to Apollo in 2024 for $11.2 billion — and now repurchase it for $14.2 billion.
Regarding analyst coverage, Citigroup raised Intel from Hold to Strong-Buy after reviewing the results. Royal Bank of Canada increased its price target from $48 to $80. BNP Paribas went from underperform to buy. The overall rating remains steady, with an average target of $72.12 – which now lies below the current trading price.
Large institutional investors were accumulating shares ahead of the report. Norges Bank initiated a position worth approximately $2.2 billion during the fourth quarter. Vanguard increased its stake by 3.5%. Institutional ownership currently stands at approximately 64.5% of shares outstanding.
Despite supply constraints in its data center business – where demand continues to outpace production capacity – the company confirmed that it will gradually increase production each quarter.
