Intel Beats Q1 Expectations as AI Demand Shifts Toward CPUs

Intel (INTC) outperformed Wall Street expectations in the first quarter of 2026, reporting revenue of $13.6 billion, a 7% increase year-over-year. The results comfortably surpassed management's previous guidance range of $11.7 billion to $12.7 billion, sparking a surge in the company's share price during extended trading. The growth was primarily fueled by the company's data center and AI segment, which saw revenue climb 22% to $5.1 billion. This acceleration suggests that the market is recognizing the critical role of Central Processing Units (CPUs) in coordinating complex AI workloads, moving beyond the initial dominance of GPUs as AI shifts toward inference and agentic deployment. Financial health improved across key metrics, with non-GAAP earnings per share rising to $0.29 from $0.13 in the year-ago quarter. Adjusted gross margins expanded to 41% from 39.2%, while the adjusted operating margin saw a significant jump to 12.3% from 5.4%. CEO Lip-Bu Tan highlighted that the next wave of AI will bring intelligence closer to the end user, increasing the demand for Intel's CPUs and advanced packaging. This strategic shift is already yielding results, with the Intel Xeon 6 being selected as the host CPU for Nvidia's DGX Rubin NVL8 systems and a new multiyear collaboration established with Google. Looking ahead, Intel provided a positive second-quarter outlook, guiding for revenue between $13.8 billion and $14.8 billion and adjusted earnings per share of $0.20. While the company's foundry business remains a point of risk, the current trajectory suggests a renewed bull case for the semiconductor giant.