Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 23, 2026 · Beat 5 of last 7 quarters
Intel Corp. reported Q2 FY2026 revenue of $16.13B, a beat of 11.7% against consensus, and EPS of $0.42, a beat of 100.0%.
The Buildout is a website built on agentic AI tools, currently in beta, and could have factual errors.
Intel's results reinforce that the AI infrastructure buildout is broadening beyond accelerators into CPUs, advanced packaging, and substrates, with management describing industry-wide supply constraints across leading-edge wafers, memory, and substrates as persisting for the foreseeable future. The decision to raise 2026 CapEx above $20B and signal significantly higher 2027 spending — with tooling up 40% versus 2025 and the vast majority in the U.S. — is a direct capacity response to AI-driven demand signals and long-term customer agreements. Management's view that CPU-to-GPU ratios are approaching parity and could eventually skew toward CPUs on a unit basis suggests server CPU density remains a structural growth vector for the buildout.
Intel reported Q2 revenue of $16.1B, $1.8B above the midpoint of guidance, with non-GAAP gross margin of 41.8% (~280 bps above guidance) and non-GAAP EPS of $0.42 versus $0.20 guided. AI-driven businesses grew greater than 70% year-over-year and contributed approximately 70% of revenue. CCPG revenue was $8.9B, up 15% sequentially, with AI PC revenue up 26% sequentially and now two-thirds of client revenue mix; DCAI revenue was $6.3B, up 24% sequentially and 59% year-over-year; Intel Foundry revenue was $5.8B, up 6% sequentially with external foundry revenue of $293M and an operating loss of $2.1B. Q2 operating cash flow was $7B and the company exited with approximately $30B in cash and short-term investments. Factories across Intel 7, Intel 3, and Intel 18A exceeded internal volume targets, 18A output rose more than 50% quarter-over-quarter, and the company began risk production of 18A-P while meeting milestones toward the 14A 0.9 PDK in October.
Management guided Q3 revenue to $15.8B–$16.8B (midpoint $16.3B) with non-GAAP gross margin of 42% and EPS of $0.38, while keeping full-year non-GAAP opex at roughly $16.5B. They raised 2026 CapEx to more than $20B — up significantly versus expectations entering the year — and said 2027 capital expenditures will be significantly above 2026 levels, with the vast majority spent across the U.S. network. Server CPU demand improved again since last quarter, with management forecasting strong double-digit industry unit growth this year and next and momentum extending into 2028; PC consumption is expected to be subseasonal in the second half and down low double digits for all of 2026 on rising memory prices and constraints. Supply remains very tight, with near-term linearity skewed toward the end of Q3 and into Q4, especially for servers, and management said they will not catch up to demand in Q4. On foundry, 14A risk production for internal products remains on track for the second half of 2027 with a decision made in Q2 to fully commit to high-volume ramp in 2028; 18A-P entered risk production and PDK 0.9 for 14A is on track for October. Management framed emerging markets in physical AI, purpose-built silicon, advanced packaging, and external wafers as each multibillion-dollar annual revenue opportunities in the not-too-distant future.
“Our core message is simple. Strong demand for our products continue to outpace our growing supply.”
on Demand vs. supply
“Industry is facing one of the most severe supply constraints in its history across leading-edge logic silicon wafers, memory and [ substrates ]. These shortages will persist for the foreseeable future.”
on Industry supply constraints
“Due to strong customer demand signals, we're raising our outlook for 2026 and now expect our CapEx to be more than $20 billion, which is up significantly versus our expectations entering the year.”
on CapEx raise
What does the ~$3B CapEx increase this year and significantly higher next year imply for foundry customers — have you received part orders for 14A or 18A-P, and how does it split between front-end and packaging?
Zinsner said the CapEx is fairly broad-based and will include advanced packaging given excitement around EMIB-T, but will skew toward the front end since fabs are much more expensive than packaging facilities. He framed the increased investment as a signal of confidence in customers across all business units, particularly where long-term agreements provide multi-year demand visibility, while emphasizing discipline — CapEx goes in place only when confident of a good return.
What happens to your server market share — does having fabs help you gain share this year, and how do you think about competing versus AMD and ARM over the next five years?
Tan said demand is strong and the challenge is growing supply to meet customer requirements, pointing to a strong server roadmap including Clearwater Forest, Diamond Rapids, and Coral Rapids with SMT. He said Intel continues improving single-thread and multithreading competitiveness, called ARM a great partner with a strong relationship, and noted some areas where Intel is still behind but catching up fast, with major effort to leapfrog some CPU architecture.
With capacity coming online toward the end of the quarter, does that imply a big Q4 revenue step-up, and can you provide puts and takes?
Zinsner said Intel only guides one quarter out, but acknowledged that if supply improves toward the end of Q3 and into Q4, there would be a lift — while stressing Intel will not catch up and will be behind in Q4. He noted supply is a combination of internal wafers plus advanced packaging, substrates, T-glass, and memory, with some of those areas the most challenged parts of the supply chain; front-end wafers improve more linearly while others are chunkier, with some logjam breaking toward the end of Q3.