Intel Crushes Earnings as Stock Soars on Xeon CPU and Foundry AI Demand
Intel's share price is surging ahead of today's opening bell after the chip maker posted financial results for its first quarter of fiscal 2026. For the sixth quarter in a row, Intel's earnings beat expectations, this time with Intel posting $13.6 billion in Q1 revenue for a 7% year-over-year gain, including $5.1 billion from its Data Center and AI (DCAI) segment.
In an email, Intel told HotHardware that a CPU renaissance is afoot as AI transitions from training to inference. Intel says it is well positioned to take advantage of the AI shift on the compute side, with its Xeon chips being the most deployed CPU silicon, including a collaboration with NVIDIA that sees Intel's Xeon 6 CPUs selected as the host CPU for DGX Rubin NVL8 systems.
"The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic. This shift is significantly increasing the need for Intel’s CPUs and wafer and advanced packaging offerings," said Lip-Bu Tan, Intel CEO. "With a solid foundation in place, we are addressing this opportunity by listening to our customers and driving their success with our technical expertise and differentiated IP. This deliberate reset to how we operate drove a sixth consecutive quarter of revenue above our expectations, as well as new and deepened relationships with strategic partners."
Xeon 6, which is optimized for AI at the edge, is also at the heart of a multi-year collaboration with SambaNova on a heterogeneous hardware solution.
Intel also reported strong results from its Foundry division, which contributed more than $5.4 billion to its quarterly revenue, versus $4.5 billion in the previous quarter and $4.1 billion in Q1 2025. Tan notes that Intel has made steady progress on its Intel 4, 3, and 18A yields, all of which are now running ahead of internal projections. Just as importantly, Tan says the accelerating deployment of AI infrastructures has created a meaningful opportunity for the chip maker as it continues building its external foundry business.
"We delivered robust Q1 results, reflecting the growing and essential role of the CPU in the AI era and unprecedented demand for silicon, as well as our disciplined execution to expand available supply," said David Zinsner, Intel CFO. "We remain focused on maximizing our factory network to improve available supply and meet our customers’ needs throughout the year."
Intel also generated $7.7 billion from its Client Computing Group (CCG). That's down 6% sequentially from $8.2 billion last quarter, but up from $7.6 billion in same quarter from a year ago and actually more than Intel was expecting. According to Intel, demand for its consumer chips remains resilient despite growing inflationary pressure, with demand outstripping supply for the quarter. Intel also says its Series 3, which spans Panther Lake on the high end and Wildcat Lake in the mainstream segment, is its best product launch in five years.
Shares of Intel rose nearly 30% before today's opening bell on the strong earnings. Looking ahead, Intel expects revenue for the second quarter to be in the range of $13.8 billion to $14.8 billion. Intel also expects to see early design commitments emerge starting in the second half of 2026 and into the first half of 2027
