2026 07 23 Earnings Intc Q2 Fy2026

Summary

Intel's Q2 FY2026 was the 7th consecutive above-guidance quarter and the strongest revenue growth in 15+ years — but the load-bearing causal tension is the capex-ahead-of-named-customers gap: management raised FY2026 capex to >$20B (+~$3B) and FY2027 "significantly above 2026 levels," justified by customer "signal" and prepayments, yet named zero external 18A/14A foundry wins under repeated analyst pressure. The bull-case falsifier for the Intel-foundry theses (tsmc-saturation-to-intel-anchor-stack, samsung-as-third-foundry-leg, packaging-scarcity-to-emib-t-second-source, taiwan-chokepoint-to-allied-reshoring) is precisely whether that customer signal converts to disclosed POs. Separately, Zinsner's admission of the "most severe supply constraints in [industry] history across leading-edge logic, silicon wafers, memory, and substrates" corroborates hbm-cowos-as-binding-bottleneck, memory-shock-to-oem-value-transfer and mature-node-ai-adjacent-shortage from a second first-party source.

Fetch note: the extraction layer returned attributed quotes + figures, not the fully verbatim transcript (investing.com copyright refusal per SOURCE_RELIABILITY.md). Quotes below are as-close-to-verbatim as the fetch returned; treat as partial. Source URL is the citable record.

Transcript

(Attributed extraction — key causal statements and figures, speaker-labeled. Not the complete verbatim transcript.)

Headline figures

David Zinsner (CFO): Q2 revenue $16.13B (beat guidance midpoint by ~$1.8B), +25% YoY — strongest growth in 15+ years. Adjusted EPS $0.42 vs. $0.20 guidance (consensus ~$0.21). Non-GAAP gross margin 41.8% (~280 bps above guide). Operating cash flow $7.0B.

Segment revenue (Zinsner): Client Computing & Physical AI Group (CCPG) $8.9B (+15% QoQ); Data Center AI (DCAI) $6.3B (+24% QoQ, +59% YoY); Intel Foundry $5.8B (+6% QoQ), of which external foundry revenue only $293M, foundry operating loss $2.1B (improved $348M QoQ).

Guidance (Zinsner): Q3 revenue $15.8B–$16.8B (mid $16.3B), EPS $0.38, GM 42%. FY2026 capex >$20B (up ~$3B vs prior). FY2027 capex "significantly above 2026 levels."

18A / 14A process ramp

Lip-Bu Tan (CEO): "18A output increased meaningfully in the quarter. Yields continue to track ahead of expectations. We are now ramping multiple new products on 18A while supporting growing demand for our lead products, including Panther Lake and Wildcat Lake."

Tan: "The successful volume ramp of 18A for our internal products provide important validations as our Intel Foundry engages with external customers."

Tan (14A): "PDK 0.5 is now complete, and PDK 0.9 is on track for October. Defect density and transistor performance are all outpacing 18A development… I'm increasingly confident that the 14A will be highly competitive process offering across key vectors of performance, power, density, cost, and schedule." Timeline: "Risk production for our internal products in the second half of 2027, and we make the decision in Q2 [2027] to fully commit to high volume ramp in 2028." "I'm pleased to see the increasing momentum on customer engagements for Intel 14A."

External foundry customers & deals

Named commitments: none disclosed. No specific customer announcement for 18A, 18A-P, or 14A external work.

Zinsner: "We're investing for all of our business units, both internally and externally, and we take a holistic view of what our wafer demand will look like… and we build capacity that is aligned with that view." On prepayments: "Our customers willing to invest with us, and we've had prepays from customers that has enabled us to unlock capacity."

Advanced packaging (EMIB-T)

Tan: "Customer interest for EMIB-T continue to be very high. Technology is compelling, providing capabilities for advanced AI silicon solutions, which are not possible with today's mainstream offerings. We continue to have a growing EMIB-T backlog. Yield and reliability are hitting targets… we're focused on ramping the technology into high volume and high quality to support customer ramps in 2027."

ASIC / design services (Tan + Zinsner): Fortinet security-processor collaboration "a strong step forward"; ~$2B run rate for ASIC/purpose-built silicon (Zinsner); 3x YoY growth in design services.

AI & server demand

Tan: "Strong demand for our products continue to outpace our growing supply. Today, we are seeing the strongest revenue growth in more than 15 years." Server: "Q2 year-over-year server growth was the strongest on record, Xeon 6 continue to be one of the fastest ramping products in Intel history."

Zinsner: "Collectively, our AI-driven businesses grew greater than 70% year-over-year, including record data center growth, and contributed approximately 70% of revenue."

Admitted risks / falsifiers

Zinsner (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."

Zinsner (PC): "We expect PC consumption to be sub-seasonal in the second half of the year and down low double-digits percent for all of 2026, impacted by rising memory prices and constraints."

Tan (competition, on AMD/ARM share): "Some areas we are still behind, but we are catching up very fast."

Zinsner (cash-flow drag): "We may have to make investments in the back end as well, particularly with third parties. That could be a drag to cash flow next year, and make getting it to a positive number a little bit more challenged."

Sharpest analyst Q&A (foundry economics & commitments)

Ben Reitzes (Melius Research): "What does that imply for your foundry customers? Does it mean that you've received some hard orders for Intel 14A or 18A-P?" — Zinsner: "This increased investment is a signal of our confidence in customers… we remain very disciplined around spending… we will put CapEx in place when we feel very confident we can generate a very good return on it."

Vivek Arya (BofA Securities): "When will that confidence be backed by actual customer announcements?… How much of that CapEx increase is for external customers versus just expanding capacity for your internal needs?" — Tan deflected to PDK/yield validation.

CJ Muse (Cantor Fitzgerald): "You're just going to build it if you've got the signed contracts with customers?" — Zinsner: "No, we're going to be more thoughtful around it… given our confidence around next year… we must have pretty significant confidence in our customers, or we wouldn't be putting the POs in place today."

Joe Moore (Morgan Stanley): pressed on AMD and ARM share loss (see Tan's "catching up very fast" above).