Intel Corporation (Nasdaq: INTC) has long played second fiddle to the more established giants in the AI race. For much of that race, the technology powering the hardware AI needs to run on has been GPUs, like the kind Nvidia excels in making.
But as industry focus shifts towards how CPUs can accelerate AI tasks, Intel’s recent earnings report shows the company is starting to benefit significantly, sending its stock price surging today. Here’s what you need to know.
What’s happened?
Yesterday, Intel reported its first-quarter 2026 financial results for the period that ended on March 28. Those results were much better than analysts had been expecting. The most salient numbers from Intel’s Q1 include:
- Total revenue of $13.6 billion (up 7% year-over-year)
- Adjusted earnings per share (EPS) of 29 cents
- Client Computing Group (CCG) revenue of $7.7 billion (up 1% year-over-year)
- Data Center and AI (DCAI) revenue of $5.1 billion (up 22% year-over-year)
To put those top two figures into context, they easily exceeded investors’ expectations. As noted by CNBC, LSEG analysts had expected Intel to post an EPS of 1 cent and revenue of $12.4 billion.
The AI data center boom boosts Intel’s revenue
Diving into Intel’s Q1 earnings more, you notice something interesting. While the majority of Intel’s revenue—$7.7 billion of it—comes from its Client Computing Group (CCG), the division that designs and sells its hardware solutions (ie: CPU and other chips) for consumer PCs and workstations, that division only grew 1% in Q1.
But the company’s Data Center and AI (DCAI)—its second-biggest revenue source—saw its sales surge 22% during the quarter, reaching $5.1 billion. It’s this haul that seems to have most excited investors.
The DCAI’s revenue is directly driven by the massive demand for AI data centers. Those data centers need servers not just with GPUs, but with as powerful CPUs as possible to help process AI tasks. Intel’s DCAI provides such CPUs, which include the company’s high-end Xeon processors.
And the need for high-end processors in the explosion of AI data centers being built doesn’t look likely to abate anytime soon. That’s great news for Intel.
“The CPU is reinserting itself as the indispensable foundation of the AI era,” the company’s CEO, Lip-Bu Tan, commented on the company’s earnings call. “This isn’t just our wishful thinking, it’s what we hear from our customers.”
Intel’s forecast also helps boost INTC stock
It’s not just a better-than-expected Q1 that is cheering investors today, however. Wall Street is also reacting well to the company’s Q2 forecast. For its current Q2, Intel expects revenue between $13.8 billion and $14.8 billion. The company is also expecting adjusted earnings per share (EPS) of 20 cents. As noted by CNBC, those figures are well above the $13.07 billion and 9-cent EPS analysts were expecting.
As a result of the company’s earnings report, Intel shares have surged. As of the time of this writing, INTC shares are currently up more than 22% in early morning trading to $81.74.
That massive single-day boost means INTC shares have now surged more than 80% year-to-date. Over the past 12 months, INTC shares are now up more than 224%.
Those are gains investors are clearly hoping are just beginning as Intel’s data center business continues to pick up steam.
