Intel Earnings Might Prove the AI Boom Is Still Going Strong — Or About to Stall

Investors are watching Intel (NASDAQ: INTC) up of second-quarter results owed aft Thursday's close. Shares person tally 185.77% twelvemonth to day and 353.35% implicit the past year, but beryllium 21.3% beneath the June high.

An AI Rerating Meets a Reality Check

The setup this 4th is loaded. Last quarter, Intel posted non-GAAP EPS of $0.29 connected gross of $13.577 billion, a 7.18% year-over-year summation and the sixth consecutive 4th of gross supra expectations. Data Center and AI gross jumped 22% to $5.052 billion, and Foundry grew 16% to $5.421 billion.

CEO Lip-Bu Tan told analysts that "the CPU is reinserting itself arsenic the indispensable instauration of the AI era", with the CPU-to-GPU ratio successful inference workloads shifting from 1-to-8 toward 1-to-4. Analysts present expect the fastest quarterly gross maturation successful astir six years, driven by CPUs progressively utilized to powerfulness AI agents.

Consensus Estimates Snapshot

Margins, Apple, and the PC Question

I'll beryllium watching 3 things closely. First, gross margin. TD Cowen analysts flagged that adjusted gross borderline is expected astir 38.8%, inactive pressured by dense foundry investments and the costs of ramping caller manufacturing processes. Any propulsion supra 41% would validate the operational leverage story.

Second, the Apple (NASDAQ:AAPL) angle. President Trump announced a imaginable woody successful April for Intel to manufacture processors for Apple, though neither institution has confirmed it. Any acknowledgment connected the telephone would beryllium a foundry watershed. Prediction markets already delegate a 52% probability that Foundry gross tops $6 billion.

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Third, the PC drag. Management is "prudently readying for PC request to weaken successful the 2nd half", with full-year PC portion TAM expected down debased treble digits. Client Computing grew conscionable 1% past quarter, and you should look astatine whether that enactment stalls further portion information halfway accelerates.