TLDR
- Wall Street projects Q1 adjusted earnings of $0.02 per share versus $0.13 last year, with revenue expected near $12.4 billion
- The foundry division faces a projected $2.4 billion Q1 operating loss, relying solely on Intel as its internal client
- Shares have skyrocketed 235% in twelve months, reaching a fresh peak of $70.33, now valued at 92x forward earnings
- Intel’s dominance in data centers collapsed from 71% in 2021 to merely 7% last year as Nvidia captured market share
- Strategic agreements with Nvidia, Google, Elon Musk’s Terafab project, and Apollo’s factory stake buyback are transforming investor sentiment
Intel delivers 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 attracting external clients to the company’s foundry operations.
Analysts anticipate Q1 adjusted earnings per share of $0.02, representing a significant drop from $0.13 during the comparable quarter last year. Revenue forecasts cluster around $12.4 billion, indicating approximately a 2% year-over-year contraction.
The chipmaker has experienced an extraordinary rally. From bottoming at $17.67 twelve months ago, INTC shares have rocketed 235% higher, touching an all-time peak of $70.33 in recent sessions. Current trading reflects a forward price-to-earnings ratio of 92 — substantially above the S&P 500’s approximately 21x multiple.
This premium valuation isn’t justified by immediate profitability. Instead, it reflects strategic agreements and favorable political positioning.
Tan divested a 9% ownership stake to the U.S. government, securing strong support from the Trump administration. He also forged a collaboration with Nvidia that granted the AI semiconductor leader a 4.5% stake in Intel. Additionally, a partnership with Elon Musk’s ventures will establish the Terafab manufacturing site in Texas, supplying chips for SpaceX, xAI, and Tesla.
Intel secured a multi-year agreement with Google to deliver AI and inference computing capacity on Google Cloud utilizing its Xeon processor lineup. In another significant transaction, the company repurchased a 49% interest in a fabrication facility previously sold to Apollo Global Management in 2024 — spending $14.2 billion to reacquire an asset sold for $11.2 billion.
The Foundry Problem Hasn’t Gone Away
The foundry operation continues to represent Intel’s biggest obstacle. Currently, it serves a single client: Intel’s own product divisions. Wall Street analysts project a $2.4 billion operating deficit for Q1.
Tan has stated explicitly that funding next-generation manufacturing capabilities requires revenue from third-party customers. Without external business, the financial model fails.
Intel’s fabrication technology has trailed Taiwan Semiconductor Manufacturing for years, creating barriers to attracting major fabless semiconductor companies that depend on TSMC. Eliminating this technology gap — or persuading customers to commit despite it — represents the critical hurdle.
PC Weakness Adding Pressure
The Client Computing division, encompassing PC processors, accounts for approximately 57% of anticipated Q1 revenue. This segment faces headwinds from a worldwide memory component shortage that’s elevating PC prices and suppressing consumer demand.
The International Data Corporation forecasts global PC shipment volumes will decline 11.3% in 2026, although increased average selling prices should maintain relatively stable revenue levels. Intel projects Client Computing revenue around $7.1 billion for Q1, representing roughly a 7% year-over-year decrease.
More encouraging is Intel’s Data Center and AI division, expected to generate $4.41 billion in Q1, reflecting 6.8% year-over-year growth. The company reported supply limitations on data center processors in Q4 but indicated expectations for improvement following Q1.
The emergence of AI agents — which depend extensively on CPUs for functions including web navigation and data manipulation — is providing Intel’s flagship products renewed significance in AI infrastructure deployment.
Intel reported supply constraints affecting data center chips during Q4 2025 and anticipates conditions will improve throughout 2026.
