Intel Q2 Beats Estimates, But Stock Tumbles 8% as Analysts Split on Foundry Catalyst

Intel (INTC) crushed Wall Street expectations with its Q2 earnings, but the stock took a beating in Friday trading on July 24. The stock closed at $92.32, down 7.89% from the prior day’s $100.23 close, after hitting an intraday low of $91.58. With U.S. markets closed over the weekend, that close stands as the latest price. The day before (July 23), INTC had already slipped 2.3% to close at $100.23^[MarketBeat]. Despite the strong numbers, the selloff was driven by analyst disagreement over Intel’s valuation, foundry progress, and forward guidance.

Earnings Beat: Revenue and Profit Crush Wall Street Estimates

Intel’s Q2 numbers were a standout. Revenue came in at $16.1B, up 25% YoY and well above the $14.5B analyst consensus. EPS of $0.42 was nearly double the $0.22 estimate^{[TradingView]}. Stifel analysts called it “a massive, demand-driven beat,” noting revenue exceeded expectations by ~12%, EPS by roughly 100%, and operating margins by about 610 basis points^{[TradingView]}.

Guidance was also positive. Intel raised its full-year 2026 capex forecast to $20B from $18B and signaled it may tap capital markets for funding^{[TradingView]}. The move signals management’s confidence in its manufacturing capabilities and growth trajectory.

Foundry: Loss Narrows, But Key Catalyst ‘Has Not Yet Arrived’

The foundry business, central to Intel’s turnaround story, made progress but missed the market’s hoped-for milestone. The division’s operating loss shrank to $2.1B from $3.2B a year ago^{[TradingView]}. Intel has recently won marquee customers like Apple (AAPL) and Tesla (TSLA), but the Q2 report did not announce any new external customer signings^{[TradingView]}.

Multiple analysts flagged this gap as the market’s focus. Stifel maintained a “Hold” rating but cut its price target to $110 from $120, saying Intel’s 2026 stock re-rating “has already priced in a large part of the early turnaround,” while the key catalyst investors are waiting for—signing external foundry customers—“has not yet arrived”^{[TradingView]}. Mizuho’s Vijay Rakesh also trimmed his target to $109 from $135, keeping a “Neutral” rating, citing margin pressure and foundry execution risk over the long term despite tailwinds from agentic AI servers^{[TradingView]}.

Analyst Targets Flooded: From ‘Sell’ to ‘Buy,’ the Split Is Wide

Wall Street firms quickly adjusted Intel’s price targets and ratings after the print, but the moves were far from uniform. Morgan Stanley’s Joseph Moore raised his target to $84 from $75, maintaining an “Equal-Weight” rating. He noted the stronger-than-expected results are tied to market enthusiasm for the long-term foundry story, but his own conviction on Intel’s foundry prospects is “low,” and he sees server market share prospects as “at best mixed”^{[TradingView]}.

Wedbush’s Matt Bryson hiked his target sharply to $98 from $60 but kept a “Neutral” rating. He said he expects the world’s largest computing chip maker’s fundamentals to stay positive but still finds it hard to justify Intel’s current valuation^{[TradingView]}. Rosenblatt raised its target to $80 from $65 but kept a “Sell” rating, citing rising AI compute demand. JPMorgan’s Harlan Sur made one of the biggest upward revisions, lifting his target to $85 from $45, but maintained an “Underweight” rating, saying Q2 results and Q3 guidance “beat by a wide margin” thanks to cycle times, wafer starts, and record server momentum^{[TradingView]}.

On the bullish side, BNP Paribas Exane upgraded Intel from “Underperform” to “Buy” in April with a $60 target; Benchmark raised its target to $140 from $105 in May with a “Buy” rating; and Zacks Research upgraded from “Hold” to “Strong Buy” in June^[MarketBeat].

AI and Foundry Trends: Opportunities and Challenges Under the Long-Term Growth Narrative

Intel is tying its transformation to the broader AI infrastructure boom. The company is integrating AI capabilities into PCs, enterprise systems, and edge computing platforms, with its client business reoriented around traditional computing and physical AI applications^{[TradingView]}. On the manufacturing side, Intel’s 18A process has entered volume production for multiple products, with the company reporting improved yields, higher factory output, and better cycle times. Development of the next-generation Intel 14A is also on track^{[TradingView]}.

The expanding demand for AI infrastructure is moving beyond GPUs, creating opportunities in CPUs, networking, custom silicon, and advanced packaging. Intel is benefiting from broader adoption of Xeon processors among enterprise and hyperscale customers, and is strengthening its position through networking products, custom chips, and partnerships with cloud providers^{[TradingView]}. Still, headwinds remain: supply constraints on leading-edge components, memory market volatility, fierce competition across CPU/GPU/networking/ASICs, and heavy capex needs could all weigh on Intel’s ability to convert AI tailwinds into sustained financial growth^{[TradingView]}.

On Seeking Alpha, one analyst wrote that Intel’s 2026 performance in the semiconductor value chain is “truly stunning” and argued its “best days are still well ahead,” upgrading the stock^{[Seeking Alpha]}. That analyst disclosed long positions in Nvidia (NVDA), AMD, and TSMC (TSM).

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