Lanceljx
07-24

Intel’s Q2 looks like a credible turnaround milestone, not yet proof that the turnaround is complete. Revenue hit $16.13B, up 25% YoY, while data-centre revenue jumped 59%. More importantly, Q3 guidance also came in well above expectations. 


The bullish case is strengthening: AI infrastructure is reviving demand for Intel CPUs, pricing power is returning, and adjusted gross margin reached 41.8%, with management guiding roughly 42% next quarter. 


The catch is valuation and execution. At around $98, investors are already pricing in a substantial recovery. Intel still needs to demonstrate that 18A can ramp economically and external foundry customers can become meaningful, rather than the recovery being mainly stronger CPU pricing and AI server demand.


I would view the next phase roughly as $105–110 as the first major test, with $120+ requiring continued earnings upgrades and convincing foundry progress. Conversely, if margins stall or 18A/foundry execution disappoints, the stock could surrender a sizeable portion of this re-rating.


So I would not call Intel cheap anymore. The story has shifted from “Can Intel survive its turnaround?” to “Can earnings grow fast enough to justify the turnaround valuation?” That is a healthier story, but also a much higher bar.

Intel Reports Thursday: Can the Quantum Rally Clear the Margin Test?
Intel rose 3.61% Tuesday amid a semiconductor rally and its Classiq acquisition, but Thursday’s earnings are the key test. Consensus expects $0.40 EPS on $16.78B revenue; investors will watch server products, foundry losses, margins, and capex. Bulls see improving mix and utilization lifting profits; bears say quantum remains distant and cannot offset foundry cash burn. What would best confirm a turnaround: stronger product margins, narrower foundry losses, or positive free cash flow?
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