Intel's comeback is genuine: $13.6 billion in the first quarter.

      Intel reported Q1 revenue of $13.6 billion on April 23, surpassing the consensus estimate of $12.4 billion by 9.4% and exceeding its own January guidance midpoint by $1.4 billion, marking the sixth straight quarter of beating its financial forecasts. The stock experienced a nearly 20% increase in after-hours trading, contributing to a year-to-date rise of over 80%. CEO Lip-Bu Tan attributed this to “unprecedented demand for silicon” resulting from the transition of AI workloads toward CPU-heavy inference and agentic computing architectures.

      The stock has surged 84% in 2025 and has risen more than 80% so far in 2026, showcasing a remarkable recovery for a company that laid off 15% of its workforce in July 2025 and canceled chip fabrication projects in Germany and Poland.

      The key figures reveal consistent growth, with Q1 revenue increasing by 7% year-on-year. Non-GAAP earnings per share of $0.29 surpassed the consensus estimate of $0.01 by a margin of 29, reflecting a 1,350% surprise as noted by Investing.com. Non-GAAP gross margin reached 41%, about 650 basis points ahead of guidance. GAAP EPS registered at negative $0.73, due to restructuring charges and other items excluded from adjusted figures, highlighting the difference between the GAAP loss per share and the non-GAAP earnings beat.

      Non-GAAP net income was $1.5 billion, more than double the previous year’s figure of $646 million on a similar basis. The turnaround is being driven by the Data Centre and AI (DCAI) segment, which saw revenue growth of 22% year-on-year, reaching $5.1 billion, up from $4.1 billion last year. Operating margin in DCAI significantly improved from 13.9% to 30.5%, with operating income hitting $1.5 billion. Intel noted continued demand for Xeon server CPUs and anticipates “double-digit year-over-year growth” in DCAI backed by numerous long-term supply agreements with key customers.

      Revenue from the Client Computing Group (PC chips) hit $7.7 billion, exceeding the $7.1 billion consensus. AI PC revenue saw an 8% sequential increase, now accounting for over 60% of Intel's client CPU mix.

      Tan's strategic perspective directly challenges the notion that Nvidia GPUs are the sole players in AI computing, arguing instead that as AI transitions from pre-training, which is graphics-heavy and processed in data centers, to inference and agentic workloads, which are latency-sensitive and spread across edge devices, servers, and PCs, the CPU's role becomes crucial. “The CPU is reestablishing itself as the essential foundation of the AI era,” Tan remarked during the earnings call, framing this as a structural change rather than a temporary upturn.

      Two new client partnerships announced during the earnings report further support this thesis. Intel has entered a multi-year agreement with Google to provide Xeon CPUs for AI, inference, and other workloads for Google Cloud, marking a significant victory for Intel amidst competition with AMD in the data center chip market. Additionally, the company revealed plans to collaborate with Elon Musk on the upcoming Terafab semiconductor research facility in Austin, Texas, which will produce chips for SpaceX, xAI, and Tesla.

      Intel Foundry, its external chip manufacturing division, posted an operating loss of $2.4 billion in Q1, a notable figure but an improvement from previous quarters. The foundry strategy, which competes with TSMC to manufacture chips for external clients on advanced process nodes, is a key component of Tan’s turnaround plan. The recently launched 18A process node in Arizona is central to this strategy, alongside a new partnership with SambaNova focusing on next-generation heterogeneous AI inference architecture.

      For Q2 2026, Intel projected revenue between $13.8 billion and $14.8 billion, indicating a year-on-year growth of $1.4 billion at the midpoint of $14.3 billion. They also forecasted non-GAAP EPS of $0.20 and a gross margin of 39%.