Earnings Recap — Q2 FY2026
Q3 2026 · Reported July 23, 2026 · Beat 5 of last 7 quarters
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Intel's strong server CPU growth and capacity expansion plans underscore the critical role of x86 CPUs in AI infrastructure, particularly for inference and agentic workloads. The company's aggressive CapEx ramp and advanced packaging investments (EMIB-T) signal that the AI buildout is driving demand for both wafer and packaging capacity, benefiting the broader supply chain.
Intel reported Q2 revenue of $16.1B, well above the $14.3B midpoint of guidance, with non-GAAP gross margin of 41.8% and EPS of $0.42. DCAI revenue hit a record $6.3B, up 59% YoY, driven by strong hyperscale and enterprise demand. Intel Foundry revenue was $5.8B, with 18A output 25% above target and up 50% QoQ. The company raised its 2026 CapEx outlook to over $20B and signaled a significant increase in 2027 CapEx, citing strong customer demand signals and long-term agreements.
Management raised 2026 CapEx to more than $20B and guided 2027 CapEx to be significantly above that, with the vast majority spent in the U.S. They expect server CPU demand to grow strong double-digits this year and next, with momentum extending into 2028. PC consumption is forecast to be subseasonal in H2 and down low double-digits for all of 2026 due to rising memory prices. Q3 revenue guidance is $15.8B–$16.8B (midpoint $16.3B), with non-GAAP gross margin of 42% and EPS of $0.38. The tone was confident but cautious on near-term supply linearity, with capacity additions skewed toward late Q3 and Q4.
“Our core message is simple. Strong demand for our products continue to outpace our growing supply.”
on Demand-supply imbalance
“We are now ramping multiple new products on 18A, while supporting growing demand for our lead products, including Panther Lake and Wildcat Lake.”
on 18A ramp progress
“Our wafer output across our major nodes exceeded expectations from 90 days ago, and Q3 quarter-to-date 18A yields are trending ahead of targets set in March.”
on Yield and output improvement
What does the CapEx increase imply for foundry customers? Does it mean you've received part orders for 14A or 18A-P?
CFO David Zinsner said the CapEx is broad-based, including advanced packaging, but skewed to front-end fabs. He noted the increased investment signals confidence in customers across all business units, particularly where long-term agreements provide visibility. He emphasized disciplined spending tied to confident return expectations.
What do you think happens to your market share in the server space? How do you compete against AMD and ARM?
CEO Lip-Bu Tan said demand is strong and the challenge is growing supply. He highlighted a strong server roadmap (Clearwater Forest, Diamond Rapid, Coral Rapid with SMT) and efforts to improve single-thread and multithreading. On ARM, he noted ARM is a great partner and customer for foundry and IP, and Intel is catching up fast on CPU architecture.