Quick Summary
- Wall Street projects Q1 adjusted earnings per share of $0.02, a steep drop from $0.13 in the year-ago quarter, with revenue around $12.4 billion
- The foundry division is expected to record a $2.4 billion operational loss during Q1, still operating with a single internal client
- Shares of INTC have soared 235% in the past twelve months, touching a fresh peak of $70.33, and now command a 92x forward earnings multiple
- Intel’s position in the data center space has eroded dramatically—from a 71% market share in 2021 to merely 7% in the latest period, while Nvidia captured significant ground
- Strategic partnerships with Nvidia, Google, Elon Musk’s Terafab project, and a manufacturing plant repurchase from Apollo are redefining Intel’s trajectory
Intel is set to unveil its first-quarter financial results Thursday following market close. The headline figures won’t steal the spotlight—instead, investors are laser-focused on CEO Lip-Bu Tan’s commentary regarding progress in securing third-party clients for the foundry operation.
Analysts have penciled in Q1 adjusted earnings of $0.02 per share, representing a significant contraction from the $0.13 posted during the comparable quarter last year. Sales are anticipated to reach approximately $12.4 billion, marking a modest 2% year-over-year decline.
The equity has delivered an extraordinary performance. From its trough of $17.67 twelve months prior, INTC has rocketed 235% higher, recently establishing an all-time record at $70.33 last week. The stock currently trades at a forward earnings ratio of 92—substantially elevated compared to the S&P 500’s roughly 21x multiple.
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 United States government, garnering enthusiastic support from the Trump administration. He also forged an alliance with Nvidia that involved the AI chipmaker acquiring a 4.5% position in Intel. Subsequently, a collaboration with Elon Musk’s enterprises emerged to construct the Terafab manufacturing complex in Texas, dedicated to producing semiconductors for SpaceX, xAI, and Tesla.
Intel additionally secured a multi-year agreement with Google to deliver AI and inference computing capabilities on Google Cloud utilizing its Xeon processor lineup. In a significant strategic maneuver, the company arranged to repurchase a 49% interest in a fabrication facility it had previously sold to Apollo Global Management in 2024—committing $14.2 billion for an asset it had offloaded for $11.2 billion.
Foundry Operations Remain a Critical Challenge
The foundry division continues to represent Intel’s primary obstacle. Presently, it serves just a single client: Intel’s own design teams. Wall Street anticipates the unit will generate a $2.4 billion operating deficit in Q1.
Tan has explicitly stated that financing the next wave of manufacturing innovation will require revenue from external customers. Without third-party business, the financial equation fails.
Intel’s manufacturing capabilities have trailed Taiwan Semiconductor Manufacturing for an extended period, and this technological deficit has complicated efforts to attract major fabless semiconductor firms that constitute TSMC’s customer foundation. Narrowing this divide—or persuading customers to make commitments before full parity is achieved—represents the fundamental challenge.
PC Market Headwinds Compound Difficulties
The Client Computing division, encompassing PC processor sales, is projected to account for approximately 57% of Q1 revenue. This segment faces headwinds from a worldwide memory component shortage that’s elevating PC pricing and suppressing consumer demand.
The International Data Corporation forecasts global PC shipment volumes will contract 11.3% in 2026, though elevated average selling 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 expected to contribute $4.41 billion in Q1, reflecting 6.8% growth year over year. The company identified supply limitations on its data center processors in Q4 but indicated it anticipates those constraints will diminish following Q1.
The emergence of AI agents—which depend extensively on CPUs for functions including web navigation and data manipulation—is providing Intel’s traditional product portfolio with renewed importance in the expanding AI infrastructure landscape.
Intel reported experiencing supply bottlenecks on data center chips during Q4 2025 and projects improving conditions throughout 2026.
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