Intel enters its second-quarter earnings report with improving business momentum but a demanding market setup. Strong demand for server processors is supporting revenue expectations, while concerns about PC weakness, manufacturing costs and the Intel Foundry turnaround continue to limit investor confidence.
Susquehanna raised its Intel price target to $115 from $80 ahead of the report but retained a Neutral rating. The firm expects better Q2 results, primarily because of server CPU strength, while warning that personal-computer demand could be weaker than normal during the second half of 2026. Susquehanna also pointed to early progress in Intel Foundry’s advanced-packaging operations.
Intel will publish its Q2 2026 financial results after the market closes on Thursday, July 23. The earnings conference call begins at 2:00 p.m. Pacific Time.
The report will test whether Intel’s improving server business can offset challenges elsewhere—and whether the company can convert stronger demand into better margins and cash flow.
Intel’s Guidance Already Assumes Strong Q2 Growth
Intel expects second-quarter revenue between $13.8 billion and $14.8 billion, with non-GAAP earnings of approximately $0.20 per share. The midpoint of the revenue range is $14.3 billion.
That forecast followed a better-than-expected first quarter in which revenue rose 7% year over year to $13.6 billion. Adjusted earnings reached $0.29 per share, while Intel’s official Q2 outlook came in well above the Wall Street revenue estimate available at the time.
Expectations have therefore increased considerably since the April report. Investors may now require revenue close to the upper end of Intel’s guidance range rather than viewing the midpoint as a satisfactory outcome.
The company’s third-quarter forecast could have an even greater effect on INTC stock. Strong September-quarter guidance would suggest that server demand remains durable and that supply constraints are not materially limiting shipments. A cautious forecast could indicate that PC weakness or manufacturing issues are beginning to offset the data-center recovery.
Server CPU Demand Is Intel’s Main Earnings Catalyst
The strongest part of Intel’s current investment case is demand for Xeon server processors.
Intel’s Data Center and AI revenue increased 22% year over year during the first quarter. The company attributed the growth partly to higher server average selling prices, a richer mix of premium products and pricing actions designed to offset rising input costs.
The artificial-intelligence infrastructure cycle is benefiting CPUs as well as GPUs. Data centers need central processors to manage operating systems, storage, networking, databases and general computing tasks alongside specialized accelerators.
The rise of agentic AI could increase those requirements further. These systems perform multistep tasks, retrieve information and interact with external software, creating additional demand for conventional processing capacity.
Supply conditions also point to strong demand. Intel previously warned some Chinese customers of server CPU delivery times reaching as long as six months. Prices for several Intel server products in China had reportedly increased by more than 10%, although terms varied between customers.
Intel’s expanded partnership with Google provides another favorable signal. The companies are working together on Xeon processors and infrastructure processing units for AI inference and general-purpose cloud workloads.
Investors should watch Data Center and AI revenue, Xeon shipment growth and management’s commentary on supply availability. Strong demand is valuable only when Intel can manufacture and deliver enough processors to convert orders into revenue.
AMD and Arm Remain Serious Competitive Threats
Intel continues to hold a major position in server CPUs, but its historical dominance has weakened.
AMD has gained market share with its EPYC processors, while large cloud providers are increasingly developing Arm-based chips for selected workloads. Intel’s estimated server CPU share declined from more than 90% in 2019 to roughly 60% in 2025, while AMD’s share rose above 20%.
Competition places pressure on Intel to improve performance, energy efficiency and total ownership costs. Data-center customers examine not only the purchase price of a processor but also electricity usage, cooling requirements and how many servers are needed to complete a workload.
Higher industry demand may allow both Intel and AMD to grow simultaneously, particularly when supply is constrained. Over the longer term, however, Intel must show that its newer Xeon products can slow or reverse market-share losses.
Management commentary about cloud deployments, enterprise adoption and pricing will therefore be essential. Revenue growth driven mainly by higher prices may be less durable than growth supported by increased unit demand and customer wins.
PC Weakness Could Offset Data-Center Momentum
Susquehanna’s cautious view of second-half PC demand remains an important risk.
Intel’s Client Computing Group supplies processors for notebooks and desktop computers. The business remains a major source of company revenue, even as investors increasingly focus on servers and foundry services.
PC demand depends on consumer confidence, corporate replacement cycles, channel inventory and whether new products provide enough value to encourage upgrades. Intel and other chipmakers are promoting AI PCs, which contain dedicated neural-processing hardware for running some AI tasks locally.
The long-term opportunity could be meaningful, but adoption remains uncertain. Businesses may delay replacements until AI software produces clearer productivity benefits, while consumers may not pay higher prices for features they rarely use.
Weak PC shipments could pressure Intel’s product mix and factory utilization during the second half. Investors should therefore monitor management’s comments on notebook demand, corporate refresh cycles and inventory levels ahead of the holiday quarter.
Intel Foundry Must Show Commercial Progress
Intel Foundry is the company’s most ambitious turnaround project and one of its largest financial risks.
The business aims to manufacture and package chips for Intel’s internal product groups and outside customers. Intel wants to establish itself as a credible alternative to TSMC and Samsung, particularly for U.S. and European customers seeking more geographically diversified production.
Susquehanna highlighted improving traction in advanced packaging. This area combines processors, memory and specialized chiplets into complete computing systems and has become increasingly important for AI hardware.
Packaging could help Intel attract external business before customers commit major processor designs to its manufacturing nodes. A chip designer may use Intel’s packaging technology while producing individual components through another foundry.
Investors should nevertheless distinguish internal Intel Foundry revenue from sales generated through independent customers. External contracts, production volumes and repeat business will provide stronger evidence that the strategy is working.
Intel also recently announced a €5 billion investment in its Irish manufacturing operations as part of its broader AI and high-performance computing expansion. The project forms part of the company’s planned 2026 capital spending.
That investment could strengthen future capacity, but it also increases pressure on management to deliver attractive returns.
Margins Will Determine the Quality of the Beat
Intel’s Q2 results will not be judged on revenue alone.
The company continues to face high depreciation, restructuring expenses and the cost of ramping advanced manufacturing technologies. New processes can initially produce lower yields, meaning fewer usable chips are obtained from each wafer.
If server revenue rises while manufacturing costs remain elevated, Intel could beat sales expectations without delivering equally strong profit growth.
Investors should focus on gross margin, operating expenses and free cash flow. A high-quality report would combine revenue near the upper end of guidance with improving profitability and controlled capital spending.
The market will also examine whether Intel can increase processor prices without damaging demand. Pricing actions helped first-quarter server revenue, but customers have alternatives from AMD and Arm-based suppliers.
Why Susquehanna Remains Neutral
Susquehanna’s higher target indicates increased confidence in Intel’s earnings potential, but the unchanged Neutral rating reflects considerable execution risk.
Intel is simultaneously trying to regain server momentum, stimulate PC upgrades, improve manufacturing yields, secure external foundry customers and invest in new capacity. Each effort requires substantial spending and disciplined execution.
The stock has also benefited from improving sentiment around Intel’s AI exposure and manufacturing strategy. That raises the possibility that a large portion of the expected recovery is already reflected in the share price.
A strong report would include revenue close to or above $14.8 billion, solid Xeon growth, better margins and constructive third-quarter guidance. The biggest risks are weaker PC demand, server supply constraints, continued foundry losses and a forecast that fails to meet elevated expectations.
FAQ
When will Intel report Q2 2026 earnings?
Intel will release its second-quarter results after the market closes on July 23, 2026. The earnings call begins at 2:00 p.m. Pacific Time.
What is Intel’s Q2 revenue guidance?
Intel expects revenue between $13.8 billion and $14.8 billion, with non-GAAP earnings of approximately $0.20 per share.
Why did Susquehanna raise its Intel price target?
Susquehanna cited stronger server CPU demand and early advanced-packaging progress. It raised its target to $115 from $80 but retained a Neutral rating.
What is the most important Intel earnings metric?
Data Center and AI revenue will be central, but investors should also monitor gross margin, foundry losses and third-quarter guidance.
What are the main risks for INTC stock?
Major risks include weak PC demand, competition from AMD and Arm processors, manufacturing delays, high capital spending and insufficient external foundry growth.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making any investment decisions.
