Intel Corporation (INTC) saw its shares skyrocket 28% in premarket trading on Friday, April 24, 2026, setting the stage for a record open as the chipmaker delivered a robust first-quarter earnings report and an optimistic outlook fueled by surging demand for artificial intelligence infrastructure. The company's forecast for second-quarter revenue between $13.8 billion and $14.8 billion handily beat analyst expectations, signaling a significant turnaround for the semiconductor giant.
Strong Q1 Performance and Bullish Guidance
For the first quarter of 2026, Intel reported revenue of $13.6 billion, a 7% increase year-over-year, exceeding market projections. The company posted a GAAP net loss of $3.7 billion, or $0.73 per share, but on an adjusted basis, earnings came in at $0.29 per share. Looking ahead, Intel guided for second-quarter adjusted earnings of $0.20 per share, well above the consensus estimate of $0.09 per share, according to LSEG data via Reuters.
Intel CFO David Zinsner highlighted "unprecedented demand for silicon" in the quarter, noting improvements in supply execution. CEO Lip-Bu Tan echoed this sentiment, pointing to a supply-demand imbalance, particularly for Xeon server CPUs, which are selling faster than the company can deliver.
AI Data Centers Drive CPU Resurgence
A key theme in Intel's earnings call was the reassertion of CPUs in AI workloads. As the focus shifts from training AI models—dominated by GPUs—to inference, where AI responds to user prompts, CPUs are gaining renewed importance. "The CPU is reasserting itself in AI setups," Tan told analysts, adding that customers are shifting back to deploying more server CPUs relative to accelerators. This trend is a significant reversal for Intel, which largely missed the initial AI chip boom driven by GPU demand from Nvidia (NVDA).
The company's data center and AI segment reported revenue of $5.1 billion, a 22% increase from the prior year, underscoring the momentum. Intel's client computing group, which includes its core PC chips, generated $7.7 billion, up just 1% year-over-year. Intel Foundry posted $5.4 billion in revenue, a 16% gain, though the segment reported an operating loss of $2.4 billion due to early-stage spending on advanced process technologies like Intel 18A and 14A.
Tesla Foundry Win Marks Milestone
In a major strategic win, Tesla CEO Elon Musk announced that the electric vehicle maker plans to use Intel's upcoming 14A process for its Terafab AI chip project in Austin, Texas. This marks Intel Foundry's first marquee external client, a significant step in its efforts to challenge TSMC's dominance in contract chipmaking. While Seaport Research Partners analyst Jay Goldberg cautioned that the Tesla agreement may not reach the volume scale of Apple or Nvidia, he noted, "It can be real volumes."
Challenges and Risks Ahead
Despite the positive news, Intel faces headwinds. The company managed to offload some finished-goods inventory in Q1, including older chips, but Zinsner warned this benefit may not repeat in Q2. Additionally, Intel expects PC unit demand to drop by a low double-digit percentage in the second half of the year and flagged rising costs for memory, wafers, and substrates that could dampen demand.
Investors are paying a premium for the stock, with shares trading at nearly 90 times 12-month forward earnings—higher than both AMD (AMD) and Nvidia. Intel shares have already climbed roughly 80% year-to-date before Friday's anticipated surge, leaving little room for error if the company fails to meet its next growth targets.
