Is Intel Inventory a Purchase After Its Newest Earnings Report?

Intel (NASDAQ:INTC) lately delivered blowout earnings outcomes for the second quarter of 2026.

Adjusted earnings per share of $0.42 got here in double what Wall Avenue analysts had been anticipating, whereas income of $16.1 billion got here in practically $1.7 billion increased than consensus estimates.

Missed Nvidia in 2009? This Uncommon Sign Is Flashing Once more. In 2009, a “Double Down” sign flashed for a little-known chipmaker referred to as Nvidia. For the primary time in years, that very same “Whole Conviction” sign is flashing for a corporation 1/one hundredth the scale of Nvidia. Proceed »

“Robust demand for our merchandise proceed to outpace our rising provide,” Intel’s CEO Lip-Bu Tan stated on the corporate’s earnings name. “The surging demand and speedy build-out of compute infrastructure internationally creates a significant alternative for us in our product enterprise in addition to our foundry enterprise.”

Intel additionally offered robust steerage for the present quarter, estimating adjusted EPS of $0.38 and income between $15.8 billion and $16.8 billion. Each got here in increased than analysts had been modeling.

The optimistic information, nevertheless, has accomplished little for Intel’s inventory, which is down practically 33% over the previous month.

Is Intel a purchase after its newest earnings report?

Picture supply: The Motley Idiot.

Excessive capex continues to plague AI shares

Whereas the top- and bottom-line numbers appeared nice, Intel additionally raised its 2026 capital expenditure steerage to $20 billion, up about $2 billion from prior steerage.

Intel’s CFO David Zinsner additionally stated it expects capex in 2027 “to be considerably above the 2026 ranges.” Zinsner stated Intel stays disciplined with capex and is spending solely in areas the place it sees good long-term returns.

All synthetic intelligence shares which have raised their capex guides have come underneath stress, as buyers query whether or not these huge investments can yield ample returns.

Some analysts are additionally involved that Intel will probably be compelled to lift capital to fund its spending ambitions.

“The prospect of shareholder dilution and continued stress on free money movement are more likely to weigh on investor sentiment and cap the inventory’s upside over the brief to medium time period,” Hendi Susanto, a portfolio supervisor at Gabellie Funds, instructed Barrons.

Nonetheless, some analysts view the elevated capex steerage as proof that Intel will be capable of purchase extra clients and see demand movement by way of.

Is the inventory a purchase?

Intel’s robust leads to the latest quarter have led to an enormous turnaround for the inventory, which is up practically 128% this 12 months and roughly 335% over the previous 12 months.

The query is, how a lot income and earnings progress has the market already pulled ahead?

For those who had been to annualize Intel’s projected adjusted EPS of $0.38, meaning Intel nonetheless trades at about 59 instances ahead earnings. On income, the valuation seems extra cheap with the inventory buying and selling at 7.2 instances ahead earnings.

Intel falls into the identical class as many different AI shares proper now.

The inventory took off when buyers realized that central processing models (CPUs), a product Intel has at all times excelled in, play a vital position in AI infrastructure, significantly for powering agentic AI, methods that may perform autonomous duties.

However now that the simple cash has been made, Intel’s success partly depends upon AI demand persevering with to ramp. That appears doubtless this 12 months and subsequent, however even the faintest indicators of slowing AI demand might hit many of those shares exhausting.

Intel additionally has a more recent Foundry enterprise for chip manufacturing, however the firm continues to be reportedly looking for an anchor buyer.

Whereas the pullback in shares over the previous month makes Intel inventory extra cheap, it nonetheless carries threat, so I’d begin with a small place and dollar-cost common for now.

The inventory will do nicely if AI demand continues to rise, however shares are more likely to be extremely unstable.

Missed Nvidia in 2009? This Uncommon Sign Is Flashing Once more

In 2009, a “Double Down” sign flashed for a little-known chipmaker referred to as Nvidia. For those who’d invested $5,000 then, you would be sitting on $2,685,702 right now.*

Now, for the primary time in years, that very same “Whole Conviction” sign is flashing for a corporation 1/one hundredth the scale of Nvidia. It is a key participant within the $1.8 trillion area race, and with the inventory lately sitting 20% off its highs, the window to get in early is closing quick.

Proceed »

*Inventory Advisor returns as of July 27, 2026

Bram Berkowitz has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Intel. The Motley Idiot has a disclosure coverage.

Is Intel Inventory a Purchase After Its Newest Earnings Report? was initially revealed by The Motley Idiot