Intel shares rocketed more than 22% in after-hours trading Thursday, smashing records from the 2000 dot-com peak. Revenue hit $13.6 billion in the first quarter, up 7% from last year and well ahead of forecasts calling for a 2% drop. Non-GAAP earnings per share landed at $0.29, dwarfing the $0.01 expected. And the second-quarter outlook? $13.8 billion to $14.8 billion. Wall Street had penciled in $13.06 billion. Fortune captured the moment perfectly: A year ago, survival questions dominated. Now it’s all about scaling supply.
Lip-Bu Tan marked his one-year anniversary as CEO with a resounding beat. He took the helm in March 2025 after Pat Gelsinger’s abrupt exit. Tan invoked Andy Grove’s famous mantra. “We are embracing our roots as data driven, paranoid, and engineering driven,” he said. That paranoia paid off. Data Center and AI revenue surged 22% to $5.1 billion. Client Computing eked out 1% growth to $7.7 billion. Foundry revenue climbed 16% to $5.4 billion, though losses persist at $2.4 billion for the quarter. Non-GAAP gross margin expanded to 41%, 650 basis points above guidance. Intel.
But here’s the shift shaking Silicon Valley. CPUs are roaring back in AI. GPUs from Nvidia still rule training, where clusters run 7-8 GPUs per CPU. Inference flips that. Now it’s 3-4 GPUs per CPU. Agentic AI could push toward parity—or even favor CPUs. “In recent months we have seen clear signs that the CPU is reasserting itself as the indispensable foundation of the AI era,” Tan declared. CFO David Zinsner nodded along. Demand outstrips supply across the board. Lost revenue? Starts with a B. Billions, that is. Wall Street Journal.
Xeon 6 processors are in full production ramp. Nvidia picked them as the host CPU for its DGX Rubin NVL8 systems. Google signed a multi-year deal for Xeon in cloud instances, plus co-developed custom IPUs. Tan wouldn’t name other customers for the 14A node—1.4 nanometer circuits—but engagements are heavy. “My style is underpromise, over deliver,” he quipped. No commitments without firm orders. Yields and cycle times improve. Then there’s Terafab. Elon Musk’s venture with SpaceX, xAI, and Tesla. Intel joined as a strategic partner to speed supply chains. “Elon and I believe the global supply chain is not keeping pace,” Tan said. Tesla eyes Intel’s 14A process. A breakthrough for foundry ambitions. Reuters.
Challenges loom. Competition bites. Nvidia launches its own CPU. AMD presses with EPYC. Arm architectures gain, including a fresh chip from Arm itself. TSMC dominates foundry. Intel’s external foundry revenue? Just $174 million last quarter. The U.S. government holds a 10% stake for national security, now up 250%. Cash swelled to $14.3 billion, bolstered by CHIPS Act funds, Nvidia’s $5 billion investment, and SoftBank’s $2 billion. Headcount dropped 32% to 85,100. Capex fell 26% to $17.7 billion. Operating income improved 81% to a $2.2 billion loss. But GAAP net loss widened to $3.7 billion on restructuring. Free cash flow stayed negative at $2.5 billion. CNBC.
Tan reset the company. Six straight quarters beating guidance. AI businesses now 60% of revenue, up 40% year-over-year. Advanced packaging? Backlog swells. Opportunity jumps from hundreds of millions to billions annually. 18A yields ahead of plan—six months early. PTL volume surges 600% in Q2. 14A outpaces it. Wafer starts rise on Intel 3, 18A. Tool spending up 25% in 2026. PC market? Slumping low double-digits this year. Memory, substrates, wafers—prices climb, squeezing margins.
Analysts cheer the execution. Shares hit all-time highs. Shacknews noted the 15% after-hours pop topping 2000 levels. Shacknews. X buzzed with validation. One post nailed it: CPU/GPU mix shifting from 1:8 to 1:1 as agentic AI takes hold. @Silicon_Fly on X. Another highlighted Tan’s line: “A year ago… survival. Today… scaling supply.” @AIStockSavvy on X.
So what now? Server CPU units grow double-digits into 2027. Inference demands more orchestration. Edge AI, physical AI loom large. Intel repurchased its Fab 34 Ireland minority stake. Malaysia assembly expands. But foundry breakeven? Distant. Margins face 18A ramp costs. Share count up 17%. Dilution drags.
Tan promises focus. “2026 is the year of execution.” Paranoid roots guide them. Supply constraints cap what could be even bigger numbers. Competitors watch closely. Nvidia, AMD, TSMC. The AI stack evolves. CPUs anchor it. Intel bets big. Investors buy in. Shares prove them right—for now.
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