Despite exceeding Wall Street’s estimates for both revenue and non-GAAP profit, Intel’s second quarter results prompted a significant negative market reaction. Management pointed to record demand for server CPUs, robust data center performance, and improving manufacturing execution as key drivers of the period. CEO Lip-Bu Tan highlighted, “Our core server CPU franchise is growing faster than ever,” and emphasized progress in Intel’s advanced packaging and foundry offerings. However, the company acknowledged ongoing supply constraints and inventory management challenges, particularly in the client segment.
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Intel (INTC) Q2 CY2026 Highlights:
- Revenue: $16.13 billion vs analyst estimates of $14.43 billion (25.4% year-on-year growth, 11.7% beat)
- Adjusted EPS: $0.42 vs analyst estimates of $0.22 (93.1% beat)
- Revenue Guidance for Q3 CY2026 is $16.3 billion at the midpoint, above analyst estimates of $15.12 billion
- Adjusted EPS guidance for Q3 CY2026 is $0.38 at the midpoint, above analyst estimates of $0.28
- Operating Margin: 11.1%, up from -24.7% in the same quarter last year
- Inventory Days Outstanding: 118, down from 137 in the previous quarter
- Market Capitalization: $413 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Intel’s Q2 Earnings Call
- Benjamin Reitzes (Melius Research): Asked about the implication of the CapEx increase for foundry customers and product mix. CFO David Zinsner explained the investment is broad-based but skewed toward front-end fabs, reflecting confidence in both internal and external customer demand signals.
- Joseph Moore (Morgan Stanley): Questioned Intel’s prospects for regaining server market share versus AMD and ARM. CEO Lip-Bu Tan responded that Intel is advancing its product roadmap, particularly with multithreading improvements and collaborations with ARM, while acknowledging areas still lagging but emphasizing efforts to catch up.
- Stacy Rasgon (Bernstein Research): Probed the drivers of unexpected client segment strength and the outlook for the second half. Zinsner attributed the performance to higher prices and mix, but noted that underlying market softness persists and expects flattish results next quarter with possible improvement from edge deployments.
- Timothy Arcuri (UBS): Sought clarification on the timing and magnitude of supply improvements and their impact on future revenues. Zinsner indicated that while Q4 may see a lift as capacity expands, ongoing bottlenecks in packaging and substrates will keep supply tight through year-end.
- Aaron Rakers (Wells Fargo): Asked about the diversity and growth trajectory of the ASIC business, as well as Intel’s strategy in memory technology. CEO Lip-Bu Tan described the ASIC opportunity as significant and highlighted recent leadership hires and ongoing collaborations with major memory vendors to address supply constraints and architecture innovation.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) Intel’s ability to ramp production of leading-edge nodes like 18A and 14A, (2) progress in onboarding external foundry customers and expansion of the advanced packaging backlog, and (3) sustained momentum in AI-driven data center and purpose-built silicon markets. Execution on capital investment plans, as well as signs of easing supply constraints, will be critical for tracking Intel’s progress.
Intel currently trades at $81.19, down from $100.23 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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