The numbers tell a story of a company caught between two very different futures. On one side sits Intel’s best quarterly growth in fifteen years — a surge powered by AI demand that has transformed its data center business into a margin machine. On the other lies the foundry division, the multi-billion-dollar bet on contract manufacturing that continues to consume cash at a staggering rate. That tension was on full display Thursday when the chipmaker reported second-quarter results that left investors parsing the fine print rather than celebrating the headline.
Revenue climbed 25 percent year-over-year to $16.128 billion, the strongest top-line expansion the company has recorded since 2010. Adjusted earnings per share came in at $0.42, more than double the $0.21 analysts had penciled in. The data center and AI segment led the charge, jumping 59 percent to $6.3 billion in revenue while delivering $2.5 billion in operating profit at a healthy 40 percent margin. The PC and edge business contributed $8.9 billion in sales and $2.3 billion in operating income. For the current quarter, management guided to roughly $16.3 billion in revenue.
The operating margin picture has brightened considerably as well. On a trailing twelve-month basis, Intel swung to a positive 7.6 percent margin, a dramatic reversal from the negative 8.3 percent posted in the same period last year.
Yet the foundry unit remains the elephant in the room. The
The market’s response to this mixed bag was characteristically volatile. On the Nasdaq, shares slipped about 1 percent Friday to close at $90.20, having swung as high as $97.90 during the session. Trading volume of roughly 105 million shares came in below average. In the days leading up to the report, the stock had already shown significant turbulence, with reports of a temporary 13 percent drop ahead of the release. In Frankfurt, the shares closed Friday at €78.42, marking a decline of nearly 30 percent over the past 30 trading sessions — a sharp consolidation following the extraordinary rally that had pushed the stock up roughly 150 percent since the start of the year.
That pullback, however uncomfortable, has done little to dent the longer-term trend. The stock still trades nearly 34 percent above its 200-day moving average, suggesting the correction is more a pause than a reversal.
Should investors sell immediately? Or is it worth buying Intel?
What’s driving the renewed optimism beneath the surface? Much of it centers on packaging technology. Intel’s EMIB (Embedded Multi-die Interconnect Bridge) solution has suddenly become a hot commodity in an industry where TSMC’s CoWoS packaging lines are reportedly booked solid through 2027. Google has reportedly ordered more than three million EMIB-T units for its TPU chips, and Nvidia is evaluating the technology for future processors. Should Nvidia commit, Intel would gain access to a revenue stream that has traditionally flowed almost exclusively to Taiwanese foundries.
The competitive landscape is shifting in other ways too. Market observers note that TSMC is developing a solution similar to Intel’s proprietary EMIB packaging technology — a sign that competitive pressure in the packaging space is intensifying precisely in the area Intel has positioned as its differentiator.
Analyst sentiment remains deeply divided, reflecting the uncertainty surrounding the company’s transformation. Of 21 recommendations tracked, four rate the stock a Buy, fourteen say Hold, and three recommend Selling. The average price target stands at $106.76. JPMorgan sits at the bearish end with an Underweight rating and an $85 target, while Jefferies holds a more constructive view with a $120 target despite its Hold rating. Bernstein (Market-Perform, $110) and RBC (Sector Perform, $80) illustrate the wide dispersion of opinions. The average target in euro terms sits at €100.45, roughly 28 percent above Friday’s closing price.
Jim Cramer has weighed in favorably on CEO Lip-Bu Tan’s diversification strategy across chips, packaging, and foundry services, setting a $110 target. But he also flagged concerns: total debt exceeding $50 billion and a forward price-to-earnings ratio of approximately 158. Institutional interest is nonetheless building — the number of hedge funds holding Intel positions rose to 112 in the first quarter of 2026 from 96 previously, with D E Shaw expanding its stake by 183 percent to $748 million. Short interest remains modest at 2.4 percent, indicating that bearish bets are still the exception rather than the rule.
The broader market context adds another layer of complexity. The AI trade that lifted all boats earlier this year has given way to a more sober assessment, as cloud giants’ massive data center spending begins to weigh on their free cash flow. Intel finds itself navigating this sentiment shift while simultaneously trying to prove that its foundry ambitions can eventually justify the billions still being poured into manufacturing capacity.
The question investors are wrestling with is straightforward: can a high-margin data center business and a suddenly in-demand packaging technology offset the foundry’s persistent losses? The answer will be written not in daily stock movements but in the foundry’s financials over the coming quarters — the very place where Intel has historically burned the most cash.
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