Key Takeaways
- Wall Street forecasts Q1 adjusted EPS of $0.02, a significant drop from $0.13 in the prior-year quarter, with revenue estimates around $12.4 billion
- The foundry division is expected to report a $2.4 billion operating loss for Q1, currently serving only Intel’s internal operations
- INTC stock has skyrocketed 235% in the past twelve months, touching a fresh peak of $70.33, now valued at 92x forward earnings
- Intel’s grip on the data center market has plummeted from 71% in 2021 to merely 7% last year, while Nvidia captured dominant market share
- Strategic agreements with Nvidia, Google, Elon Musk’s Terafab project, and an Apollo factory stake repurchase are transforming investor sentiment
Intel unveils its first-quarter financial results Thursday following market close. While the headline figures matter, investors are primarily focused on CEO Lip-Bu Tan’s commentary regarding progress in securing external foundry clients.
Analysts anticipate Q1 adjusted earnings per share of $0.02, representing a steep decline from $0.13 during the comparable quarter last year. Revenue projections hover around $12.4 billion, marking approximately a 2% year-over-year contraction.
The shares have experienced an extraordinary rally. Rising from a trough of $17.67 twelve months ago, INTC has rocketed 235% higher, recently touching an all-time peak of $70.33 last week. The stock currently commands a forward price-to-earnings multiple of 92 — dramatically above the S&P 500’s roughly 21x valuation.
This premium valuation isn’t rooted in immediate profitability. Instead, it reflects strategic partnerships and favorable political positioning.
Tan divested a 9% ownership stake to the U.S. government, securing strong support from the Trump administration. He simultaneously forged a collaboration with Nvidia that included the AI chipmaker acquiring a 4.5% position in Intel. Subsequently, Intel announced an agreement with Elon Musk’s ventures to construct the Terafab manufacturing facility in Texas, producing semiconductors for SpaceX, xAI, and Tesla.
The chipmaker also secured a multi-year arrangement with Google to deliver AI and inference capabilities on Google Cloud utilizing its Xeon processor lineup. In a significant transaction, the company decided to repurchase a 49% interest in a fabrication facility previously sold to Apollo Global Management in 2024 — spending $14.2 billion to reacquire an asset it divested for $11.2 billion.
Foundry Challenges Persist
The foundry operation remains Intel’s most pressing concern. Currently, it serves a single customer: Intel’s own product divisions. Wall Street analysts project a $2.4 billion operating deficit for Q1.
Tan has emphasized that financing next-generation manufacturing capabilities will necessitate revenue from external clients. Without third-party customer commitments, the financial model remains unsustainable.
Intel’s fabrication capabilities have trailed Taiwan Semiconductor Manufacturing for several years, creating obstacles in attracting major fabless semiconductor companies that depend on TSMC. Narrowing this technological divide — or persuading customers to commit before achieving full parity — represents the fundamental challenge.
PC Market Headwinds Intensify
The Client Computing division, encompassing PC processors, accounts for approximately 57% of anticipated Q1 revenue. This segment faces headwinds from a worldwide memory chip shortage that’s elevating PC pricing and suppressing consumer demand.
The International Data Corporation projects global PC market unit shipments will decline 11.3% in 2026, although higher average transaction prices should maintain relatively stable revenue levels. Intel anticipates Client Computing revenue of roughly $7.1 billion in Q1, representing about a 7% year-over-year decrease.
On a more positive note, Intel’s Data Center and AI division is forecast to generate $4.41 billion in Q1, climbing 6.8% year over year. The company highlighted supply limitations affecting its data center processors in Q4 but indicated these constraints should diminish following Q1.
The emergence of AI agents — which depend extensively on CPUs for operations such as web navigation and data analysis — is providing Intel’s traditional product lineup with renewed strategic importance in AI infrastructure expansion.
Intel reported experiencing supply constraints on data center processors in Q4 2025 and anticipates gradual improvement throughout 2026.
