Last week, Intel (INTC) gained 18% after posting quarterly results. INTC stock is up by ~170% in 2026. Now trading at a forward P/E of 91.8 times, what did Intel post in the first quarter to elicit the stock breakout?
In the first quarter, Intel posted quarterly revenue growth of just 7% Y/Y to $13.6 billion. Non-GAAP EPS was up by 123% Y/Y to $0.29. However, GAAP net loss topped $3.7 billion. Markets dismissed the loss, since Intel took a $3.8 billion charge related to an impairment charge related to holding Mobileye (MBLY).
Intel’s stock rise might be too good to be true. Investors assigned a premium to its valuation, reflecting its data center and AI growth. Revenue grew by 22% Y/Y to $5.1 billion. More importantly, the operating margin was 30.5%.
Intel’s 18A process node (manufacturing) successfully ramped up. The Xeon 6 processor won Alphabet’s (GOOG), fueling the INTC stock rally. This contract win is a positive development for the technology industry. NVIDIA (NVDA), which invested in Intel, cannot fulfil all customer orders. So, having Intel supply AI CPU chips would alleviate the supply shortage.
Your Takeaway
Mobileye’s drag on Intel’s results is a one-time event. Investors are confident that Intel will become a U.S. manufacturing giant. That gives markets a hedge against Taiwan Semiconductor (TSM). Any threat of China invading Taiwan (albeit many years away) would increase the value of holding INTC stock as a hedge.
