I have covered Intel’s turnaround story across multiple articles — the layoffs, the 18A yield progress, the management restructuring, the foundry ambitions, just to name a few. Each piece and story added to the mosaic. But nothing validated the thesis like July 23 evening’s Q2 results.
Intel reported revenue of $16.1 billion, up 25% year over year. In fact, that’s the strongest revenue growth in more than 15 years, according to CEO Lip-Bu Tan.
Non-GAAP EPS of $0.42 came in nearly double the Street’s $0.22 estimate. Q3 guidance of $16.3 billion at the midpoint was well above both Goldman and consensus. We had every major segment beat. Gross margins came in at 41.8% versus the Street’s 39.2%.
Goldman Sachs reviewed the results in a note shared with me at TheStreet, raising its estimates by 49% on average while maintaining a Neutral rating and an unchanged $150 price target.
INTC ranks 6th among S&P 500 stocks year-to-date at approximately 154% in gains, according to Slickcharts. It is also one of the four chip stocks Jim Cramer named as his favorites in my previous coverage.
Goldman’s take was candid: a great quarter that cleared an elevated bar. But Intel’s closest peers still offer more attractive risk-reward.
Also Read: Intel Corporation Latest News and Stories
The quarter Goldman described as “well above the Street across the board”
The specific beat magnitudes in the Goldman note are worth laying out, according to the research shared.
- Revenue of $16.1 billion was above Goldman’s own estimate of $14.3 billion and the Street’s $14.4 billion.
- Gross margin of 41.8% was above Goldman’s 39.3% and the Street’s 39.2%.
- Non-GAAP operating EPS of $0.42 was nearly double Goldman’s $0.23 estimate and the Street’s $0.22.
The Data Center and AI segment was the headline driver. DCAI revenue of $6.3 billion grew 24% quarter over quarter and 59% year over year, driven by general-purpose server demand and agentic AI, according to Goldman’s note.
Intel sees an accelerating server CPU market with a strong double-digit CAGR through at least 2028. The company is currently running in a capacity shortage position, and expects stronger sequential DCA growth in Q4 as additional supply comes online.
Related: Alphabet and Intel could reset the AI trade
Client computing revenue reached $8.9 billion, above both Goldman and Street estimates. Intel Foundry revenue of $5.8 billion was also above consensus at $5.5 billion.
“Our Q2 results represent our strongest revenue growth in more than fifteen years,” Tan said in the earnings release.
The 18A and 14A process commentary Goldman flagged as strategically significant
The technology roadmap disclosures in Q2 are the items Goldman’s note highlighted as most meaningful for the foundry investment thesis, according to the research.
Intel 18A-P entered risk production in Q2, meeting the timeline shared with customers and partners. The company entered high-volume manufacturing for a subset of Core Ultra Series 3 processors using ASML‘s EXE High NA EUV technology, the most advanced lithography available.
Related: Goldman Sachs backs surprising non-AI stocks
Intel also announced a €5 billion investment to expand manufacturing capacity and production of Xeon 6 and next-generation Xeon processors built on Intel 3, according to Intel’s second-quarter results.
The 14A process, with volume production targeted for 2028, drove a meaningful capital expenditure increase. Intel raised its 2026 CapEx guidance to over $20 billion from $17 billion previously, and expects significant further increases in 2027 to support Advanced Packaging capacity and the 14A launch, according to the Goldman note. Intel plans to increase WFE tooling spending by approximately 40% in 2026.
Goldman raised its estimates by 49% on average as a direct reflection of that demand signal, according to the note.
Why Goldman stays Neutral despite raising estimates by 49%
This is the nuanced part of the Goldman note that investors need to read carefully.
Goldman’s Neutral rating and $150 price target, based on 30 times normalized EPS of $5.00, reflects a specific comparison, not a fundamental objection to Intel’s business. “Intel’s closest peers — AMD, NVDA and AVGO — offer relatively more revenue visibility and favorable risk/reward,” the note states.
The firm acknowledges Intel as a beneficiary of rising server demand and a U.S. foundry champion with genuine geopolitical tailwinds. That happens to be the reason Jim Cramer mentioned Intel being one of his best picks, as noted in my previous coverage. It also acknowledges near-term traction in Advanced Packaging and longer-term potential in wafer outsourcing.
Also Read: Intel’s stock split history (& prospects) explained
The $8.5 billion in CHIPS Act subsidies and Intel’s unique position as America’s only advanced chip manufacturer provide a structural moat that competitors cannot replicate.
But Goldman’s upside risks are the same list that has defined the Intel story all year. From increased foundry traction, better server CPU share, and faster margin improvement.
Related: Intel and AMD just got leverage they haven’t had in years
Downside risks remain a slower-than-anticipated node ramp and share losses to AMD. Those are genuinely open questions that keep the investment profile Neutral rather than Buy, even after one of the company’s best quarters in a decade and a half.
The semiconductor industry as a whole is reporting 134% year-over-year earnings growth and 76% revenue growth in Q2 2026, according to FactSet’s July 24 data.
Without semiconductors, the Information Technology sector’s earnings growth rate would fall from 64.6% to 26.1%. Intel, for the first time in years, is firmly in the group of companies driving that sector-level outperformance rather than lagging behind it.
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