We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Intel Witnesses an Uptrend in Estimate Revisions: Is it Worth Buying?
Read MoreHide Full Article
Key Takeaways
Intel's 2026 and 2027 earnings estimates rose 44.12% and 35.42% over the past 60 days.
INTC's DCAI revenue jumped 59% year over year to $6.3 billion on strong customer demand.
Supply shortages, stiff competition and a weak PC market could limit Intel's growth prospects.
Earnings estimates for Intel Corporation (INTC - Free Report) for 2026 and 2027 have moved up 44.12% to $1.47 and 35.42% to $1.95, respectively, over the past 60 days. The positive estimate revisions depict bullish sentiments about the stock’s growth potential.
Image Source: Zacks Investment Research
INTC Rides on Strong AI Traction, Improving Manufacturing Execution
Data Center and AI (DCAI) is emerging as one of Intel’s strongest growth engines for the company. DCAI revenue increased 59% year over year to $6.3 billion in the second quarter, supported by strong demand from hyperscale and enterprise customers. Strong server CPU demand and growing adoption of Xeon 6 processors are expected to fuel growth in upcoming quarters.
Intel is rapidly broadening its traditional PC offerings by incorporating AI capabilities. AI PC revenues are up 26% sequentially and represent about two-thirds of segment revenues. At Hot Chips 2026, Intel detailed Wildcat Lake, launched as Intel Core Series 3, for laptops and intelligent edge platforms. Built on Intel 18A, it combines CPU cores, Xe3 graphics with XMX acceleration and an NPU delivering up to 17 TOPS, while marking Intel's first use of UCIe in a processor. Intel has secured 130 Series 3 edge AI design wins, and edge deployments account for 10% of CCPG revenue.
Intel is expanding beyond general-purpose CPUs into customized silicon designed for specific workloads. In the second quarter of fiscal 2026, purpose-built silicon revenue increased about 20% sequentially and nearly tripled year over year, reaching an estimated $2 billion run rate, with management targeting $4 billion in the not-too-distant future.
Operational improvements are providing another potential earnings driver. Intel is seeing better yields, faster cycle times and higher factory output across several process nodes. In the second quarter, higher revenue, improved yields and pricing contributed to a non-GAAP gross margin of 41.8%, while operating cash flow reached $7 billion.
Supply Constraints, Stiff Competition, Weak PC Market are Concerns
Intel is dealing with a difficult supply environment even as demand remains strong. Industry-wide shortages of leading-edge wafers, memory and substrates are limiting the company’s ability to fully capitalize on the growing customer requirements. Management expects PC consumption to decline at a low-double-digit rate in 2026, citing higher memory prices and supply constraints.
Intel operates in an industry characterized by aggressive competition and rapid technological change. It faces competition from Advanced Micro Devices (AMD - Free Report) and Arm Holdings (ARM - Free Report) in server CPUs. The broader AI infrastructure market remains highly contested across CPUs, GPUs, ASICs and networking. Intel's confidence in catching up and later leapfrogging competitors depends on timely execution across Clearwater Forest, Diamond Rapids and Coral Rapids.
Intel’s global manufacturing and supply chain expose it to geopolitical and trade-related risks. The company specifically highlights tensions involving the United States and China, developments around Taiwan, tariffs and export controls as factors that could disrupt operations.
Price Performance
Intel has gained 271.4% in a year compared with the industry’s growth of 35.2%. It has outperformed compared to the Zacks Computer & Technology sector and the S&P 500.
Image Source: Zacks Investment Research
The company has outperformed its peers, AMD and Arm Holdings. AMD has gained 181.6%, while ARM has increased 79.1% during this period.
Key Valuation Metric for Intel
From a valuation standpoint, Intel appears to be relatively cheaper than the industry. Going by the price/book ratio, the company's shares currently trade at 4.48 book value, lower than the industry average of 22.99.
Image Source: Zacks Investment Research
End Note
The rapid expansion of AI infrastructure has created a strong opportunity across Intel’s product offerings. In the second quarter, Intel’s AI driven business grew more than 70% year over year in the second quarter. The company is expanding its opportunity beyond traditional PCs through AI PCs, edge computing and physical AI applications. This will likely bring long-term benefits. However, supply shortages across wafers, memory and substrates are restricting the company’s ability to meet strong customer demand, while aggressive capital spending on manufacturing expansion is weighing on near-term free cash flow. Stiff competition remains a concern. Hence, with a Zacks Rank #3 (Hold), Intel appears to be on a middle-of-the-road track, suggesting that investors should exercise caution while trading the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Intel Witnesses an Uptrend in Estimate Revisions: Is it Worth Buying?
Key Takeaways
Earnings estimates for Intel Corporation (INTC - Free Report) for 2026 and 2027 have moved up 44.12% to $1.47 and 35.42% to $1.95, respectively, over the past 60 days. The positive estimate revisions depict bullish sentiments about the stock’s growth potential.
Image Source: Zacks Investment Research
INTC Rides on Strong AI Traction, Improving Manufacturing Execution
Data Center and AI (DCAI) is emerging as one of Intel’s strongest growth engines for the company. DCAI revenue increased 59% year over year to $6.3 billion in the second quarter, supported by strong demand from hyperscale and enterprise customers. Strong server CPU demand and growing adoption of Xeon 6 processors are expected to fuel growth in upcoming quarters.
Intel is rapidly broadening its traditional PC offerings by incorporating AI capabilities. AI PC revenues are up 26% sequentially and represent about two-thirds of segment revenues. At Hot Chips 2026, Intel detailed Wildcat Lake, launched as Intel Core Series 3, for laptops and intelligent edge platforms. Built on Intel 18A, it combines CPU cores, Xe3 graphics with XMX acceleration and an NPU delivering up to 17 TOPS, while marking Intel's first use of UCIe in a processor. Intel has secured 130 Series 3 edge AI design wins, and edge deployments account for 10% of CCPG revenue.
Intel is expanding beyond general-purpose CPUs into customized silicon designed for specific workloads. In the second quarter of fiscal 2026, purpose-built silicon revenue increased about 20% sequentially and nearly tripled year over year, reaching an estimated $2 billion run rate, with management targeting $4 billion in the not-too-distant future.
Operational improvements are providing another potential earnings driver. Intel is seeing better yields, faster cycle times and higher factory output across several process nodes. In the second quarter, higher revenue, improved yields and pricing contributed to a non-GAAP gross margin of 41.8%, while operating cash flow reached $7 billion.
Supply Constraints, Stiff Competition, Weak PC Market are Concerns
Intel is dealing with a difficult supply environment even as demand remains strong. Industry-wide shortages of leading-edge wafers, memory and substrates are limiting the company’s ability to fully capitalize on the growing customer requirements. Management expects PC consumption to decline at a low-double-digit rate in 2026, citing higher memory prices and supply constraints.
Intel operates in an industry characterized by aggressive competition and rapid technological change. It faces competition from Advanced Micro Devices (AMD - Free Report) and Arm Holdings (ARM - Free Report) in server CPUs. The broader AI infrastructure market remains highly contested across CPUs, GPUs, ASICs and networking. Intel's confidence in catching up and later leapfrogging competitors depends on timely execution across Clearwater Forest, Diamond Rapids and Coral Rapids.
Intel’s global manufacturing and supply chain expose it to geopolitical and trade-related risks. The company specifically highlights tensions involving the United States and China, developments around Taiwan, tariffs and export controls as factors that could disrupt operations.
Price Performance
Intel has gained 271.4% in a year compared with the industry’s growth of 35.2%. It has outperformed compared to the Zacks Computer & Technology sector and the S&P 500.
Image Source: Zacks Investment Research
The company has outperformed its peers, AMD and Arm Holdings. AMD has gained 181.6%, while ARM has increased 79.1% during this period.
Key Valuation Metric for Intel
From a valuation standpoint, Intel appears to be relatively cheaper than the industry. Going by the price/book ratio, the company's shares currently trade at 4.48 book value, lower than the industry average of 22.99.
Image Source: Zacks Investment Research
End Note
The rapid expansion of AI infrastructure has created a strong opportunity across Intel’s product offerings. In the second quarter, Intel’s AI driven business grew more than 70% year over year in the second quarter. The company is expanding its opportunity beyond traditional PCs through AI PCs, edge computing and physical AI applications. This will likely bring long-term benefits. However, supply shortages across wafers, memory and substrates are restricting the company’s ability to meet strong customer demand, while aggressive capital spending on manufacturing expansion is weighing on near-term free cash flow. Stiff competition remains a concern. Hence, with a Zacks Rank #3 (Hold), Intel appears to be on a middle-of-the-road track, suggesting that investors should exercise caution while trading the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.