Intel Corporation

What they do

Intel designs and manufactures semiconductors, operating two main segments: Intel Products (Client Computing and Physical AI Group (CCPG) and Data Center and AI (DCAI)) and Intel Foundry. CCPG makes client processors, DCAI provides data center and AI chips, and Intel Foundry offers wafer fabrication and advanced packaging. Altera, a programmable semiconductor subsidiary, was deconsolidated after selling 51% in September 2025.

Revenue drivers

• Client Computing and Physical AI Group (CCPG) — Q2 2026 revenue of $8.9 billion, up 13% YoY, driven by AI-capable client processors and physical AI/robotics growth.
• Data Center and AI (DCAI) — Q2 2026 revenue of $6.3 billion, up 59% YoY, led by Xeon 6+ and AI-optimized server products.
• Intel Foundry — Q2 2026 revenue of $5.8 billion, up 31% YoY, including external and intersegment foundry services and advanced packaging.
• All other — Q2 2026 revenue of $0.7 billion, down 33% YoY, reflecting the deconsolidation of Altera and other non-core businesses.

Recent performance

Q2 2026 revenue was $16.1 billion, up 25% YoY, with GAAP net loss of $11.0 billion or $(2.16) per share, including significant impairment charges, and non-GAAP EPS of $0.42. Gross margin on a GAAP basis rose to 40.4% from 27.5% a year ago, and operating margin turned positive at 11.1%. The company generated $7.0 billion in cash from operations during the quarter.

Strategy

Management is prioritizing AI-driven compute across CPUs, ASICs, advanced packaging, and wafer foundry, with increased investments in equipment, clean room space, and substrates to support expected growth. Intel is advancing its 18A process node, launching Xeon 6+ as the first server product on that node, and building rack-scale AI and disaggregated inference solutions with partners. The company emphasizes speed, accountability, and customer focus to improve execution and regain share.

Risks

• Programmable chip deconsolidation — The Altera sale removes a revenue source and adds transition risk as Intel integrates the partially owned affiliate.
• Customer concentration — A large portion of revenue comes from a few PC OEMs (Dell, Lenovo, HP), making Intel sensitive to their demand and inventory.
• Geographic concentration — Significant revenue from China, Singapore, and Taiwan exposes Intel to trade restrictions, tariffs, and geopolitical tensions.
• Execution on new technology — Ramping 18A and expanding foundry capacity carries yield, cost, and schedule risks that could affect profitability.

Outlook

Intel forecasts Q3 2026 revenue between $15.8 billion and $16.8 billion, with GAAP EPS of $0.31 and non-GAAP EPS of $0.38. The company expects continued AI-driven demand to support growth across products and foundry into next year, and plans meaningful capacity investments. Management anticipates revenue growth will be sustained but may moderate quarter-over-quarter.