Intel will report earnings after Thursday's closing bell, with investors focused on AI server CPU growth and foundry business progress. The chipmaker's stock has declined more than 27% from its record high close of nearly $141 per share on June 22, following a 280% gain earlier this year to its June peak. The pullback reflects broader semiconductor sector weakness as investors reassess whether hyperscalers can sustain aggressive AI infrastructure spending. Intel CFO David Zinser stated in April that first-quarter revenue of $13.6 billion—$1.4 billion above the midpoint of guidance—would have been "meaningfully higher" if supply had met demand. The company's dual role as both chip designer and manufacturer distinguishes it from rivals like Advanced Micro Devices and Nvidia, which rely on third-party foundry Taiwan Semiconductor.
Intel Faces AI Server CPU Supply Constraints Despite Strong Demand
Intel's central processing units have become critical for AI computing as the industry shifts from model training to inference, where AI models respond to user requests. The rise of advanced AI systems capable of autonomously completing multi-step tasks is driving CPU demand. First-quarter revenue reached $13.6 billion, exceeding the guidance midpoint by $1.4 billion, but CFO David Zinser said in April that revenue would have been "meaningfully higher" without supply constraints. Ben Bajarin, CEO and principal analyst at Creative Strategies, stated that "Intel has, as of right now, the most clean room space expansion opportunity sitting before it." RBC Capital analyst Srini Pajjuri noted that supply constraints allow Intel to prioritize higher-value server CPUs, improving product mix and pricing power.
Intel Expands Foundry Capacity with Ireland Investment and New Customer Deals
Intel announced plans last week to invest roughly $5.7 billion in its Leixlip, Ireland facility to increase production of Xeon-brand server CPUs and other products. The investment expands manufacturing capacity to support both Intel's own chip demand and its foundry business serving external customers. On Tuesday, Intel's foundry division secured a deal with cybersecurity firm Fortinet to produce next-generation security chips, marking the first such announcement under CEO Lip-Bu Tan, who took over in March 2025. Recent foundry wins include manufacturing and packaging opportunities for companies like Apple, MediaTek, and Elon Musk's Terafab project. President Donald Trump has stated that Intel and Apple have an agreement, though neither company has confirmed the deal. The U.S. government became Intel's largest shareholder last year.
Analysts Project 12% Revenue Growth for Intel's Second Quarter
Wall Street expects Intel's second quarter revenue to increase 12% year-over-year to $14.42 billion, according to LSEG estimates. Earnings per share are projected at 21 cents, reversing a year-ago loss of 10 cents. About 58% of analysts covering Intel have hold ratings on the stock, compared with 34% who have buy ratings, according to FactSet. RBC Capital analyst Srini Pajjuri maintains a hold-equivalent rating, stating he wants to see "meaningful progress" in gross margin expansion and foundry business development. Bajarin expects Intel to raise capital expenditures on factories, with expansion focused on cleanrooms in the United States and Ireland. He added that Intel "can add capacity in their foundries, largely here in the United States, some in Ireland as well, faster than [TSMC] can."
FAQ
What caused Intel stocks to decline 27% from their June peak?
Intel stocks fell more than 27% from the record high close of nearly $141 per share on June 22, primarily due to a broader semiconductor sector sell-off as investors reassessed whether hyperscalers can continue aggressive AI infrastructure spending. As one of the best-performing stocks in the group with a 280% gain to its June peak, Intel was vulnerable to profit-taking.
How much did Intel invest in its Ireland facility?
Intel announced last week plans to invest roughly $5.7 billion in its Leixlip, Ireland facility to increase production of Xeon-brand server CPUs and other products. The investment aims to meet demand for Intel's own chips while expanding the company's manufacturing footprint to support longer-term foundry ambitions.
What are Wall Street's expectations for Intel's second quarter earnings?
Wall Street projects Intel's second quarter revenue to increase 12% year-over-year to $14.42 billion, according to LSEG estimates. Earnings per share are expected to be 21 cents, reversing a year-ago loss of 10 cents. The earnings report is scheduled for release after Thursday's closing bell.
