Intel Corp. (INTC) Strong quarter across the board, with margin upside and positive process technology commentary

Equity Research 23 July 2026 | 8:48PM EDT

Intel Corp. (INTC): Strong quarter across the board, with margin upside and positive process technology commentary

Key stock takeaways: We expect the stock to trade higher following a strong James Schneider, Ph.D. | quarter and guidance driven by upside in the Datacenter and Client segments, Goldman Sachs & Co. LLC significantly higher gross margins, and positive commentary on supply agreements Anmol Makkar and CapEx. Given the proof points the company is seeing on 18A and 14A as well as | increased customer demand signals, Intel is raising its 2026 CapEx to $20bn, with a Goldman Sachs & Co. LLC

significant increase expected in 2027. We believe investors were constructively Luya You | positioned heading into the quarter, driven by near-term strength in Server CPUs, Goldman Sachs & Co. LLC sustained momentum in advanced packaging, and signs of progress on its advanced Khalil Fenina foundry nodes - and we think the company’s results and commentary cleared this | elevated bar. We expect Intel to be a beneficiary of rising server demand (driven by Goldman Sachs & Co. LLC

agentic AI), and we see upside optionality from Intel’s role as a US champion with its foundry business - with near-term traction in advanced packaging, and longer-term potential in wafer outsourcing. However, we are Neutral rated on the stock as Intel’s closest peers (i.e. AMD, NVDA and AVGO) offer relatively more revenue visibility and favorable risk/reward in our view.

Quarterly results were well above the Street: Intel reported revenue of $16.1 bn, well above GS at $14.3 bn and the Street at $14.4 bn. Gross margin of 41.8% was well above GS at 39.3% and the Street at 39.2%. Operating margin of 17.2% was well above GS at 11.5% and the Street at 11.2%. Reported non-GAAP operating EPS of $0.42 was far above GS at $0.23 and the Street at $0.22. CCG revenue of $8.9 bn was well above GS and the Street at $8.0 bn. DCAI revenue of $6.3 bn was well above GS at $5.7 bn and the Street at $5.6 bn. Intel Foundry revenue of $5.8 bn was above GS at $5.6 bn and the Street at $5.5 bn.

n Datacenter CPU strength: Intel’s DCAI segment grew 24% QoQ and 59% YoY, driven by strength in general-purpose server demand as well as agentic AI. Going forward, Intel sees an accelerating server CPU market being driven by agentic AI with sustained unit strength and higher ASPs - with a strong double-digit growth CAGR through at least 2028. The company expects to see stronger sequential growth in DCAI for 4Q as additional supply comes on line, as the company continues to run in a capacity shortage position. n Increased CapEx Investment: Intel increased its CapEx guidance to over $20 bn in 2026 (from $17 bn prior), and now expects to increase CapEx significantly in 2027 and beyond given the ramp in its expected capacity in Advanced Packaging and in anticipation of its 14A process launch. Intel expects to increase its

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Goldman Sachs Intel Corp. (INTC)

spending on WFE tooling by ~40% in 2026 given its recent outsized investment in fab shells and cleanroom space. Going forward, the company plans to invest in both front-end wafer and advanced packaging capacity given the strong customer demand signals it is seeing. n Process technology progress and roadmap: Intel continues to see a strong yield and production volume ramp for its 18A process technology across both server and client products, and is increasing production capacity to respond to increasing demand. The company entered risk production on its 18A-P in 2Q. Relative to 14A, Intel’s internal process metrics are running ahead of 18A at the same point - and the company plans to…