Intel posts very strong Q1 2026 earnings as the AI boom starts to focus on CPUs

Intel just had its Q1 2026 earnings call, and it went better than many expected. In Q1 2026, Intel generated $13.58 billion in revenue, up 7.2% year over year. Industry experts had predicted $12.42 billion in revenue for this quarter, which Intel has clearly surpassed. Much of this revenue is down to Intel's data center and AI divisions, which brought in $5.1 billion this quarter. Revenue from external customers for Intel foundry was less than $200 million and was mostly centered around legacy wafer work.

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Intel's foundry division has been slow to get started, but now it seems like it's on its way up. With $5.4 billion in revenue generated in Q1, Intel's foundry business is starting to establish itself as a clear second option to TSMC. Intel needs to do that quickly, not just for its own sake, but also for the sake of the CPU industry. Intel's adjusted earnings per share rose to 29 cents, sending the stock up more than 15% shortly after.

Intel has had some major wins for its foundry recently, especially with Tesla becoming the first external customer for the next-gen 14A production node. They have also (finally) ramped up production on the 18A node with Panther Lake and Wildcat Lake now rolling out. Intel has also joined forces with Google to deploy Xeon processors for its AI infrastructure and has joined Tesla in the ambitious TeraFab project.

On the hardware releases side, Intel launched the Arrow Lake Refresh (200S Plus) and 200HX Plus CPUs for desktop and mobile this quarter. They also launched the Xeon 600 family for workstations, the Core Ultra Series 3 "Panther Lake", the Core Series 3 "Wildcat Lake", and the Core Series 2 for embedded and edge use. Safe to say it has been a busy quarter for Intel's consumer hardware division.

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Intel's overwhelmingly positive earnings call reflects a shift in the agentic AI demands over the past few months. While GPUs have largely dominated the AI ecosystem and remain the primary driving force, CPU demand has been increasing exponentially. This is why Arm, AMD, Meta, and Intel have put their chips in the AI CPU basket by releasing custom AI-focused silicon and making deals with each other to deploy them.

Intel CEO Lip-Bu Tan also agrees that the aforementioned shift is significantly increasing demand for Intel CPUs and advanced packaging offerings. Intel is raising chip prices to offset production costs, as reflected in its Q2 guidance of $13.8 to $14.8 billion. Intel's ASIC business is also on track to bring in more than $1 billion in revenue this year.