Intel Company (Nasdaq: INTC) has lengthy performed second fiddle to the extra established giants within the AI race. For a lot of that race, the know-how powering the {hardware} AI must run on has been GPUs, like the sort Nvidia excels in making.
However as trade focus shifts in direction of how CPUs can speed up AI duties, Intel’s latest earnings report exhibits the corporate is beginning to profit considerably, sending its inventory worth surging right now. Right here’s what you should know.
What’s occurred?
Yesterday, Intel reported its first-quarter 2026 monetary outcomes for the interval that ended on March 28. These outcomes had been significantly better than analysts had been anticipating. Essentially the most salient numbers from Intel’s Q1 embrace:
- Whole income of $13.6 billion (up 7% year-over-year)
- Adjusted earnings per share (EPS) of 29 cents
- Shopper Computing Group (CCG) income of $7.7 billion (up 1% year-over-year)
- Information Heart and AI (DCAI) income of $5.1 billion (up 22% year-over-year)
To place these high two figures into context, they simply exceeded traders’ expectations. As noted by CNBC, LSEG analysts had anticipated Intel to publish an EPS of 1 cent and income of $12.4 billion.
The AI information heart growth boosts Intel’s income
Diving into Intel’s Q1 earnings extra, you discover one thing fascinating. Whereas nearly all of Intel’s income—$7.7 billion of it—comes from its Shopper Computing Group (CCG), the division that designs and sells its {hardware} options (ie: CPU and different chips) for client PCs and workstations, that division solely grew 1% in Q1.
However the firm’s Information Heart and AI (DCAI)—its second-biggest income supply—noticed its gross sales surge 22% through the quarter, reaching $5.1 billion. It’s this haul that appears to have most excited traders.
The DCAI’s income is instantly pushed by the huge demand for AI information facilities. These information facilities want servers not simply with GPUs, however with as highly effective CPUs as attainable to assist course of AI duties. Intel’s DCAI offers such CPUs, which embrace the corporate’s high-end Xeon processors.
And the necessity for high-end processors within the explosion of AI information facilities being constructed doesn’t look prone to abate anytime quickly. That’s nice information for Intel.
“The CPU is reinserting itself because the indispensable basis of the AI period,” the corporate’s CEO, Lip-Bu Tan, commented on the corporate’s earnings name. “This isn’t simply our wishful considering, it’s what we hear from our prospects.”
Intel’s forecast additionally helps enhance INTC inventory
It’s not only a better-than-expected Q1 that’s cheering traders right now, nonetheless. Wall Road can also be reacting nicely to the corporate’s Q2 forecast. For its present Q2, Intel expects income between $13.8 billion and $14.8 billion. The corporate can also be anticipating adjusted earnings per share (EPS) of 20 cents. As famous by CNBC, these figures are nicely above the $13.07 billion and 9-cent EPS analysts had been anticipating.
Because of the corporate’s earnings report, Intel shares have surged. As of the time of this writing, INTC shares are at the moment up greater than 22% in early morning buying and selling to $81.74.
That large single-day enhance means INTC shares have now surged greater than 80% year-to-date. Over the previous 12 months, INTC shares at the moment are up greater than 224%.
These are positive factors traders are clearly hoping are simply starting as Intel’s information heart enterprise continues to select up steam.
