NEW YORK, July 24, 2026, 05:10 EDT
- Intel shares were set to open close to $104, gaining nearly 4% in premarket trading on Friday.
- Data-center revenue increased by 59%, with operating profit in the segment climbing almost fourfold.
- Intel’s midpoint for third-quarter revenue was roughly 8% higher than the LSEG consensus.
Intel Corporation NASDAQ:INTC advanced in premarket trading after surpassing quarterly forecasts. U.S. cash markets were shut. Premarket data indicated an increase of 3.6% to 4.2%, with shares trading close to $104.
The key takeaway was not just the revenue beat. Intel’s data-center division showed significantly higher operating leverage compared to its PC segment.
Yearly Data Center and AI revenue grew by $2.323 billion, while operating profit climbed $1.841 billion. The result is an incremental operating margin of 79.3%.
This means that approximately 79 cents from every extra dollar in revenue translated into segment operating profit. The measurement is based on Intel’s disclosed data and should not be considered as company guidance.
| Intel business | Q2 2026 revenue | YoY change | Q2 2026 operating income/(loss) | Q2 2025 operating income/(loss) | Q2 2026 operating margin |
|---|---|---|---|---|---|
| Data Center and AI | $6.262 billion | +59% | $2.474 billion | $633 million | 39.5% |
| Client Computing and Physical AI | $8.877 billion | +13% | $2.343 billion | $2.053 billion | 26.4% |
| Intel Foundry | $5.765 billion | +31% | $(2.089) billion | $(3.168) billion | (36.2)% |
Source: Intel. Margins are derived from disclosed numbers. Segment revenue accounts for transactions between segments.
Data-center revenue made up 71% of Intel’s overall revenue expansion. The client operating margin held steady at 26.4%. Foundry losses decreased by $1.079 billion but were still significant.
That combination accounts for the significant rebound in overall company margins. Non-GAAP gross margin improved to 41.8%, climbing from 29.7%. Non-GAAP operating margin increased to 17.2%, compared with negative 3.9%.
Second-quarter revenue came in at $16.13 billion, topping the $14.42 billion estimate from LSEG. Adjusted earnings were reported at 42 cents per share, while analysts had forecast 21 cents. Adjusted gross margin outperformed projections by three percentage points.
Chief Executive Lip-Bu Tan stated that “AI is driving unprecedented demand for compute.” Chief Financial Officer David Zinsner referenced improved factory yields along with decreased production cycle times. Intel Corporation
Intel projected its third-quarter revenue to fall within a range of $15.8 billion to $16.8 billion, with the midpoint of $16.3 billion coming in 7.9% above the LSEG consensus. The company’s adjusted earnings outlook at 38 cents per share surpassed the estimate of 27 cents by 41%.
Shifting demand is influencing Intel’s investment strategy. Zinsner increased the projected capital outlay for 2026 to $20 billion, up from $18 billion. Further substantial spending growth is expected in 2027. Intel has entered into processor deals with certain customers lasting three to five years.
Shares of Intel ended Thursday at $100.23, falling 2.3% amid a widespread drop in technology stocks. Despite this, the stock was up 5.5% from last Friday’s closing price of $95.04. Premarket moves show the gain rising to about 9%.
Optimism is still strong. The share price has climbed roughly 172% so far this year, though it is currently down over 25% from its record closing high on June 22.
If Intel maintains its momentum in server growth, the stock may keep revaluing, according to Futurum Group strategist Shay Boloor. He additionally highlighted that foundry economics and attracting external customers are further challenges ahead.
GAAP results warrant attention. Intel posted a net loss of $11.0 billion, compared to adjusted net income of $2.2 billion. The most significant reconciling item was a $12.5 billion mark-to-market charge related to escrowed shares.
The primary risk continues to be cash conversion. Adjusted free cash flow was at negative $8.4 billion, impacted by a net partner outflow of $12.2 billion. The Foundry unit posted another $2.1 billion loss, with capital requirements still rising.
Two major external events are scheduled for the week ahead. The Federal Reserve will convene on July 28-29. Meanwhile, Microsoft Corporation NASDAQ:MSFT and Meta Platforms, Inc. NASDAQ:META are set to announce their results on July 29, offering investors new insights on cloud and AI infrastructure investment.
Intel has shifted investor focus from viability to long-term strength. The remaining issue is if its 79% incremental data-center margin will hold as investment grows.
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