Intel Stock Surges 20% After-Hours as Q1 Earnings Smash Expectations on AI and Foundry Demand
Intel Corporation delivered a stunning first-quarter 2026 earnings beat on April 23, reporting revenue of $13.58 billion against analyst expectations of $12.42 billion and adjusted EPS of 29 cents versus a forecast of just 1 cent, triggering a 20% surge in after-hours trading and extending the chipmaker's remarkable year-to-date rally to more than 80%.
Key Earnings Figures
The results marked a 7.2% year-over-year revenue increase — Intel's first such gain after five declines in the past seven quarters. The company's data centre division led the charge, posting a 22% revenue jump to $5.1 billion, fuelled by surging demand for CPUs in artificial intelligence workloads. Foundry revenue rose 16% year-over-year to $5.4 billion.
Intel also issued strong second-quarter guidance, projecting revenue of $13.8 billion to $14.8 billion and adjusted EPS of 20 cents — well above the $13.07 billion and 9 cents that analysts had expected. Despite the strong top-line performance, Intel's net loss widened to $4.28 billion due to ongoing restructuring costs.
Key Drivers: Tesla, Google, and the AI Era
CEO Lip-Bu Tan, who took over from Pat Gelsinger last year, emphasised the CPU's resurgence as the foundation of the AI era. Two landmark partnerships underscored the point: Google expanded its agreement to use Intel's Xeon processors and custom infrastructure chips for AI and inference work on Google Cloud, while Tesla announced plans to spend up to $3 billion with Intel for its next-generation 14A chip fabrication technology at its Terafab project in Texas.
Intel's 18A foundry node, now open to external customers, has attracted interest from Amazon, Cisco, and SpaceX, among others. The company's advanced packaging capabilities — among the most sophisticated in the world — are expected to generate billions of dollars per customer, according to CFO David Zinsner.
Why It Matters
Intel's resurgence is a significant development for the US semiconductor industry. The Trump administration championed the company as a cornerstone of domestic chip manufacturing, with the US government becoming its largest shareholder last year. Nvidia has since acquired a 4.5% stake, and SoftBank has also invested billions, signalling broad confidence in Intel's turnaround.
The stock had already surged 74% year-to-date before the earnings release, reaching a fresh peak of $70.33 and valuing the company at approximately $296 billion. Analysts cautioned, however, that the stock was trading at a high forward earnings multiple of 92 to 128 times, well above the consensus price target of $51.
What's Next
Intel's 14A process node is being developed at an accelerated pace, with multiple customers actively evaluating it. The company's ability to convert foundry interest into long-term revenue contracts will be closely watched by investors as the AI hardware race intensifies.
Sources: CNBC; GuruFocus; TradingKey
