Intel Corp. (NASDAQ:INTC) stock gained in premarket trading on Friday after the chipmaker reported stronger-than-expected second-quarter results and issued third-quarter guidance above analyst estimates.
Beats Estimates, Raises Outlook
The chipmaker beat second-quarter expectations, with revenue rising 25% year over year to $16.13 billion, above the $14.42 billion estimate. Adjusted EPS of 42 cents doubled estimates of 21 cents, while Data Center and AI revenue jumped 59% and Intel Foundry revenue rose 31%.
The company also guided third-quarter revenue to $15.8 billion to $16.8 billion, ahead of the $15.01 billion estimate. Intel expects adjusted EPS of 38 cents, topping the 24-cent estimate.
Wall Street largely viewed Intel’s quarter as further evidence that its turnaround is gaining momentum. Analysts said stronger-than-expected results, improving foundry execution and robust AI-driven server demand reinforce the recovery narrative.
However, they cautioned that Intel still must consistently execute, attract more external foundry customers and convert its heavy AI investments into sustainable, profitable growth as it competes with Advanced Micro Devices Inc., NVIDIA Corp. and Taiwan Semiconductor Manufacturing Company Ltd..
Intel Foundry Execution Remains The Key Catalyst
SemiAnalysis’ Doug O’Laughlin told CNBC on Friday that Intel’s upside depends on whether it can execute its foundry strategy after years of missteps.
He said Intel should announce more external customers over time, including potential interest from Apple Inc., Microsoft Corp. and Amazon.com Inc., but first needs to prove it can deliver for the customers it has already won.
Benchmark’s Cody Acree also told CNBC on Friday that Intel needs firmer foundry customer announcements to drive the stock higher. He said the company is making progress on yields and development, which could help attract more interest.
Benefits From AI-Driven Server CPU Demand
Acree said Intel’s second-quarter results showed broad strength across foundry, PC and server businesses. He said server CPU demand remains strong as hyperscalers continue spending on AI infrastructure.
Acree said AI workloads are moving toward inference and agentic AI, which require CPUs to orchestrate and manage activity alongside GPUs.
He said AMD has gained share from Intel, but the expanding server CPU market could benefit both companies as Intel’s products become more competitive.
Intel Valuation Hinges On Turnaround Execution
Deepwater Asset Management’s Gene Munster told CNBC on Friday that Intel’s post-earnings rally gives investors more upside potential, helped by stronger September-quarter guidance and commentary around 14A, which he sees as a 2028 catalyst.
Munster said Intel remains much smaller than NVIDIA in data center and AI, and NVIDIA’s GPU business still holds a stronger position in the AI infrastructure buildout. Still, he said Intel’s smaller base gives it more room for upside than larger AI leaders.
O’Laughlin said Intel can look expensive on current sales and cash-flow metrics, but investors are paying for the possibility of margin recovery if the company executes in foundry.
Turnaround Still Needs Proof
O’Laughlin said Intel’s U.S. manufacturing footprint gives it scarcity value because the company spans process design through fabrication domestically. The analyst said Intel should not give up its Ohio cleanroom, especially as AI chip demand accelerates.
He said partnerships with memory suppliers such as SK hynix Inc. matter because leading-edge AI accelerators require both logic chips and memory packaging.
He also said Intel’s restructuring reflects an effort to move past organizational bloat, noting that AMD and Taiwan Semiconductor had previously employed fewer people combined despite stronger performance.
Acree said Intel’s valuation looks stretched versus its history, but he sees that as secondary while the company remains early in its turnaround and investors wait for proof from foundry, PCs, servers and AI infrastructure.
Intel Price Action
INTC Stock Price Activity: Intel shares were up 5.55% at $105.79 during premarket trading on Friday, according to Benzinga Pro data.
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