Intel Q1 Revenue Beats Forecast, Stock Surges 18% on AI Demand

Intel reported first-quarter fiscal 2026 revenue of $13.6 billion, up 7% year-over-year, beating expectations and driving the stock up 18% in after-hours trading on April 24, 2024. The company posted a GAAP loss of $0.73 per share and non-GAAP earnings of $0.29 per share, with gross margin of 39.4%, up 2.5 percentage points year-over-year.

Financial Guidance and Earnings Performance

Intel guided for Q2 revenue between $13.8 billion and $14.8 billion, with GAAP EPS of $0.08 and non-GAAP EPS of $0.20. Both Q1 results and Q2 guidance exceeded analyst expectations, marking the sixth consecutive quarter of revenue beats. Intel CFO David Zinsner stated: “Our Q1 performance was strong, reflecting the increasingly critical role of CPUs in the AI era, unprecedented demand for chips, and our disciplined execution to expand supply. We will continue to focus on maximizing our factory network to increase supply and meet customer demand throughout the year.”

Data Center and AI Segment Drives Growth

The Data Center and AI segment revenue reached $5.1 billion, growing 22% year-over-year and becoming the company’s fastest-growing business unit. In contrast, the Client Computing Group posted $7.7 billion in revenue, growing only 1% year-over-year.

CEO Pat Gelsinger emphasized the strategic shift: “The next wave of AI will bring intelligence closer to end users, from foundation models to inference and ultimately to autonomous intelligence. This transition significantly increases demand for Intel CPUs, foundry, and advanced packaging. With a strong foundation, we’re seizing this opportunity by listening to customer needs and leveraging our technology expertise and differentiated IP to drive their success.”

CPU Role in AI Infrastructure

Gelsinger highlighted a fundamental market shift: “Over the past few years, the high-performance computing narrative has been almost entirely about GPUs and other accelerators. In recent months, we’ve seen clear evidence that CPUs are re-establishing their position as an indispensable foundation in the AI era. CPUs now serve as the orchestration layer and critical control plane across the entire AI stack. This isn’t just our subjective view—it’s feedback from our customers, and it’s evident in the demand momentum for our products. Xeon server demand shows strong and sustained momentum. Customers are deploying server CPUs alongside accelerators in ratios that are shifting in favor of CPUs.”

Gelsinger noted that despite increased factory output, “demand still exceeds supply across all businesses, particularly for Xeon server CPUs, and we expect this momentum to continue through this year and into next year. Xeon 6 products based on Intel 3 and Core Ultra 3 products based on Intel 18A are now in full production ramp, each representing the fastest new product ramp in five years. Maximizing and optimizing factory output to meet customer demand is our top priority.”

New Product Launches

Intel expanded its client product portfolio this quarter with several launches: the Intel Xeon 600 series processors for workstations, the Intel Core Ultra 200S Plus and 200HX Plus for desktop and mobile devices, the Intel Core 2 series for edge computing in medical and life sciences, the Intel Core Ultra 3 series with Intel vPro technology, and the Intel Core 3 series, which for the first time brings Intel’s 18A (1.8-nanometer) architecture to the mainstream market.

Strategic Partnerships

Intel announced a multi-year collaboration with Google to continue deploying Intel Xeon processors in Google’s workload-optimized instances, including the latest Xeon 6 processors powering C4 and N4 instances. The partnership also includes joint development of custom ASIC infrastructure processing units (IPUs) to improve utilization, reduce complexity, and scale AI workloads more efficiently.

Intel Xeon 6 was selected as the host CPU for NVIDIA’s DGX Rubin NVL8 system, reinforcing Intel’s core role in leading AI infrastructure deployments.

Foundry Business Expansion

The Foundry Services segment generated $5.4 billion in revenue, up 16% year-over-year. However, CFO David Zinsner disclosed that external customer revenue from foundry operations totaled less than $200 million in Q1, with the remainder derived from internal business.

Intel has been actively pursuing external foundry customers. The company announced joining the Terafab project as a strategic partner alongside SpaceX, xAI, and Tesla. Tesla CEO Elon Musk stated the company plans to adopt Intel’s 14A process technology for the Terafab project. Intel 14A is the next-generation technology following 18A.

Gelsinger commented: “Both Elon and I believe global semiconductor supply is currently not keeping pace with sustained demand growth.”

Gelsinger expressed satisfaction with foundry technology research and development progress over the past year.

Capacity Expansion

Intel expanded assembly and test capacity in Penang, Malaysia, to support customer products. The company also repurchased a 49% minority stake in its joint venture entity for Ireland’s Fab 34 facility. Gelsinger stated this agreement reflects Intel’s sustained business growth momentum, driven by the increasing importance of CPUs in the AI era and the company’s significantly strengthened balance sheet.