Intel Corp. shares rocketed nearly 20% in after-hours trading Thursday after the chip giant unveiled first-quarter results that crushed Wall Street expectations. Revenue climbed 7% year-over-year to $13.6 billion, smashing the midpoint of prior guidance at $12.2 billion and consensus estimates around $12.4 billion, according to Intel’s official release. Non-GAAP earnings per share hit $0.29, more than double the $0.13 from a year earlier and leagues ahead of forecasts near $0.01, as reported by Yahoo Finance. Data center and AI sales accelerated 22% to $5.1 billion, up from 9% growth in the prior quarter. And the outlook? Second-quarter revenue guidance of $13.8 billion to $14.8 billion implies 11% growth at the midpoint, blowing past analyst calls for $13 billion.
Supply constraints everywhere. Demand outstripping capacity. That’s the refrain from CEO Lip-Bu Tan and CFO David Zinsner on the earnings call. “Demand continued to run ahead of supply for all our businesses, especially for Xeon server CPUs, where we expect sustained momentum this year and next,” Tan declared, per transcripts highlighted in MarketBeat. Adjusted gross margins expanded to 41% from 39.2%. Operating margins jumped to 12.3% from 5.4%. Adjusted net profit soared 156% to $1.5 billion.
But GAAP losses. $0.73 per share. Restructuring charges near $4 billion masked the underlying strength. Foundry business grew revenue 16% to $5.4 billion yet posted a $2.4 billion operating loss. Progress, though. Tan emphasized a shift in AI deployments: “Customers are deploying server CPUs alongside accelerators in a ratio that is moving back toward CPU.” Inference workloads. Agentic AI. Edge computing. These demand CPUs for orchestration, data movement, control—not just GPUs for training.
Xeon 6 in full ramp. Selected as host CPU for Nvidia’s DGX Rubin NVL8 systems. Multiyear Google deal blending Xeon processors with custom ASICs. “The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic… This shift is significantly increasing the need for Intel’s CPUs,” Tan added, as noted in The Motley Fool. AI-related revenue now 60% of total, up 40% year-over-year. Zinsner: “Product ramps are accelerating—Intel 3-based Xeon 6 and 18A-based Core Series 3 are in full volume ramp, the fastest in five years.”
18A yields ahead of plan. Potentially hitting year-end targets mid-year. 14A outpacing it. External foundry revenue tiny at $174 million, but customer design commitments eyed for late 2026. Advanced packaging backlog swelling—now a multi-billion-dollar opportunity, not hundreds of millions. Terafab alliance with Elon Musk’s SpaceX, xAI, Tesla to refactor fab tech using Intel’s 14A process. Partnerships stacking up.
Market reaction swift. Shares hit $66.78 after hours, market cap nearing $335 billion. Broader ripple: AMD up 7-8% in sympathy, validating x86 CPU demand surge across training-to-inference shift, as X users like @MilkRoadAI noted. Server OEMs—Dell, HPE, Super Micro—stand to gain from CPU-richer racks. Equipment makers like Applied Materials, Lam Research see tailwinds from Intel’s 25% higher 2026 tool spending. Memory prices rising, a boon for Micron, SK Hynix.
Risks linger. PC market slumping low double-digits this year. Foundry losses persist. Capex flat but tool-heavy. Component inflation—memory, substrates, wafers—squeezing margins into second half. Zinsner flagged 18A ramp costs as a gross margin drag. Still, execution inflection clear. A year ago, survival talk. Now, scaling supply.
HSBC upgraded pre-earnings, calling server CPUs a “bigger catalyst,” via Seeking Alpha. Yahoo Finance previewed CPUs key to AI growth as agents demand orchestration beyond GPUs: “While AI models still largely run on GPUs… the tasks that AI agents perform… rely on CPUs.” Reuters eyed supply fixes amid AI data center CPU surge.
Intel’s resurgence reframes the AI narrative. GPUs dominate headlines. CPUs quietly reclaim ground. Hyperscalers build racks needing dozens of Xeons per cluster. Inference tokens exploding 100x in two years, per prior AMD commentary. Agentic bots browsing, querying spreadsheets—CPU turf. Physical AI, edge deployments amplify it. x86 ecosystem—Intel, AMD—captures the wave. Custom ASICs doubling year-over-year. Broadcom, Marvell ride along.
And government backing. CHIPS Act funds reclassified as equity. U.S. semiconductor push aligns with Intel’s foundry ambitions. Tan: “Intel is now a very different company… focused on engineering execution and innovation.” Semiconductor TAM nearing $1 trillion, AI-fueled. 2026: execution year.
Stock at 25-year highs. Valuation stretched if foundry falters. But beats like this—coupled with AI CPU momentum—build credibility. Supply ramps quarterly. Lost demand “starts with a B.” Watch Q2. If Xeon sustains, inference accelerates, Intel’s turnaround sticks. Wall Street underestimated. Again.
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