Quick Overview
- Wall Street forecasts Q1 adjusted EPS of $0.02, dropping from $0.13 in the prior-year quarter, with revenue around $12.4 billion
- The foundry division is expected to record a $2.4 billion operating loss in Q1, currently serving just one internal client
- INTC shares have climbed 235% over the past year, recently touching a fresh peak of $70.33, valued at 92x forward earnings
- The company’s data center market presence dropped from 71% in 2021 to merely 7% in recent periods, while Nvidia captured significant ground
- Strategic agreements with Nvidia, Google, Elon Musk’s Terafab, and an Apollo factory repurchase are transforming the narrative
Intel delivers its first-quarter financial results Thursday following market close. The headline figures take a backseat to what CEO Lip-Bu Tan reveals about securing external clients for the foundry operation — that’s the information investors are eager to hear.
Analysts anticipate Q1 adjusted EPS of $0.02, marking a significant drop from $0.13 reported in the corresponding quarter last year. Revenue projections hover near $12.4 billion, representing approximately a 2% year-over-year decline.
The equity has experienced an extraordinary rally. Starting from $17.67 just twelve months ago, INTC has rocketed 235% higher, touching an all-time peak of $70.33 in recent trading sessions. The stock currently commands a 92x forward earnings multiple — a stark contrast to the S&P 500’s roughly 21x valuation.
That premium pricing reflects anticipated future potential rather than current profitability. Strategic partnerships and government relations are fueling investor optimism.
Tan divested a 9% ownership stake to the U.S. government, receiving strong support from the Trump administration. He forged a strategic alliance with Nvidia that included the AI chipmaker taking a 4.5% position in Intel. Following that came an agreement with Elon Musk’s enterprise portfolio to construct the Terafab manufacturing center in Texas, delivering semiconductors for SpaceX, xAI, and Tesla.
Intel also finalized a multi-year arrangement with Google to support AI and inference computing on Google Cloud through its Xeon processor lineup. In another significant transaction, the company agreed to repurchase a 49% interest in a fabrication facility it previously sold to Apollo Global Management in 2024 — committing $14.2 billion for an asset it divested for $11.2 billion.
Foundry Challenges Persist
The foundry operation continues to represent the primary obstacle. Currently, it serves a single client: Intel’s own product divisions. Wall Street projects a $2.4 billion operating loss for the segment in Q1.
Tan has stated clearly that advancing to next-generation manufacturing capabilities will require external customer revenue. The economics fail without third-party business.
Intel’s production capabilities have trailed Taiwan Semiconductor Manufacturing for several years, creating obstacles in attracting major fabless semiconductor firms that rely on TSMC. Narrowing that competitive distance — or persuading customers to commit while that work continues — represents the critical challenge.
PC Market Headwinds Create Additional Strain
The Client Computing division, covering PC processors, accounts for approximately 57% of anticipated Q1 revenue. This business faces pressure from a worldwide memory component shortage that’s elevating PC prices and reducing consumer demand.
The International Data Corporation projects global PC market unit shipments will decline 11.3% in 2026, though increased average selling prices should maintain relatively stable revenue levels. Intel forecasts Client Computing revenue near $7.1 billion in Q1, representing roughly a 7% year-over-year decrease.
Meanwhile, Intel’s Data Center and AI division is projected to generate $4.41 billion in Q1, climbing 6.8% year over year. The company identified supply limitations on its data center processors in Q4 but indicated expectations for improvement following Q1.
The emergence of AI agents — which depend substantially on CPUs for functions including web navigation and data handling — is providing Intel’s fundamental products with renewed importance in AI infrastructure expansion.
Intel reported supply constraints affecting data center chip availability in Q4 2025 and anticipates gradual improvement throughout 2026.
