Intel stock earnings put AI CPU supply and foundry progress in focus
Intel shares are 27% below their June record as investors look for AI server CPU growth and evidence of foundry momentum.
By Amanda Ross · Deals Correspondent
· 3 min read
Intel stock earnings after Thursday’s closing bell will test whether the chipmaker can reassure investors after a drop of more than 27% from its June record close. Wall Street is looking for signs of stronger demand for artificial intelligence server CPUs, better supply, and further progress in Intel’s foundry business.
The shares had climbed about 280% this year through a peak of nearly $141 on June 22, according to CNBC’s Investing Club, before retreating with the wider semiconductor sector. CNBC attributed the decline partly to investors taking profits and partly to concern over whether hyperscale cloud companies can keep spending heavily on AI infrastructure.
Why is Intel stock down?
CNBC’s Investing Club said the pullback reflected a broader reassessment of AI-related semiconductor valuations rather than a specific collapse in Intel’s operating outlook. Intel had been among the strongest performers in the group, making it more exposed to selling when investors questioned the pace of AI data center spending.
The company’s near-term case rests heavily on server central processing units. CPUs handle the instructions that run computer systems, and they are becoming more relevant in AI as workloads shift from training models to inference, the stage where models answer requests or complete tasks.
CNBC said demand has been particularly helped by more advanced AI systems that can carry out multi-step tasks. That has increased attention on Intel’s chips alongside AI accelerators such as Nvidia graphics processors and Google’s tensor processing units.
Supply remains a key issue. Intel reported first-quarter revenue of $13.6 billion, which was $1.4 billion above the midpoint of its guidance. Chief financial officer David Zinser said on the company’s April earnings call that revenue would have been “meaningfully higher” if supply had met demand.
What does Intel need to show in earnings?
Investors will be looking for evidence that Intel has increased output enough to capture more demand for server CPUs. RBC Capital analyst Srini Pajjuri told CNBC that tight supply could also support Intel’s mix, because the company may prioritize higher-value server processors and gain pricing power when customers have limited alternatives.
Analysts expect Intel to report second-quarter revenue of $14.42 billion, up 12% from a year earlier, according to LSEG estimates cited by CNBC. Earnings per share are expected to be 21 cents, compared with a loss of 10 cents in the year-earlier period.
The foundry business is the other focus. In semiconductors, a foundry manufactures chips, including designs created by other companies. Intel differs from Advanced Micro Devices, Nvidia and major cloud companies because it still owns advanced factories, while many rivals rely on Taiwan Semiconductor Manufacturing Co. to produce their designs.
Ben Bajarin, chief executive and principal analyst at Creative Strategies, told CNBC that Intel has a large opportunity to expand clean-room capacity, including in the United States and Ireland. Clean rooms are tightly controlled manufacturing spaces used to make advanced chips.
Intel announced last week that it plans to invest about $5.7 billion in its Leixlip, Ireland, site to expand production of Xeon server CPUs and other products. On Tuesday, Intel’s foundry division announced a deal to make next-generation security chips for Fortinet, CNBC reported.
CNBC also cited recent foundry-related wins involving Apple, MediaTek and Elon Musk’s Terafab project. The reported Apple arrangement has not been confirmed by Intel or Apple, though President Donald Trump has said the two companies have an agreement. CNBC said the U.S. government became Intel’s largest shareholder last year.
Pajjuri said Intel does not need to match TSMC fully to show progress, but he wants clearer evidence of gross-margin expansion and foundry execution. FactSet data cited by CNBC show about 58% of analysts covering Intel rate the stock at hold, while 34% rate it at buy.
This story draws on original reporting from CNBC.
