Intel Just Shocked Everyone, but Is the Stock Still a Buy?
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By Geoffrey Seiler – Apr 28, 2026 at 6:20AM ESTKey PointsIntel is benefiting from a surge in demand for server CPUs.However, the stock has doubled within the past month and now trades at a frothy valuation. Intel (INTC +2.93%) shocked the market when its quarterly results zoomed past analyst expectations. The stock has now approximately doubled in less than a month. While analysts praised the quarter and Intel's CEO after the results, it actually looks much more like a case of the company stumbling into a hot trend than anything else. Let's take a closer look at the semiconductor stock. ExpandNASDAQ: INTCIntelToday's Change(2.93%) $2.42Current Price$84.96Key Data PointsMarket Cap$427BDay's Range$82.62 - $87.1052wk Range$18.96 - $87.10Volume160KAvg Vol103MGross Margin35.90% CPUs lead the way In its first quarter, Intel benefited from the sudden surging demand for data center central processing units (CPUs), which are needed to help manage AI agents. The company said the ratio of AI accelerators, like graphics processing units (GPUs), to CPUs was closing due to the shift toward inference and agentic AI. This helped lead to a 22% jump in its AI (DCAI) product revenue to $5.1 billion. Its client computing group (CCG) product revenue edged up 1% year over year to $7.7 billion, leading to total product revenue rising 9% to $12.8 billion. Its foundry business, meanwhile, saw revenue climb 16% to $5.4 billion. However, the segment's operating losses remain elevated, with it seeing a loss of $2.4 billion in the quarter. Revenue from Intel's other businesses plunged 33% year over year to $0.6 billion, largely due to the sale of 51% of its Altera subsidiary. Overall revenue for Intel rose 7% to $13.6 billion, while its adjusted EPS more than doubled to $0.29. That was well ahead of the $0.01 per-share profit on $12.4 billion in revenue that analysts expected. Below is a table of Intel's results by segments: Intel Segment Q1 Revenue Q1 Revenue Growth (YOY) Product (CCG & DCAI) $12.8 billion 9% CCG $7.7 billion 1% DCAI $5.1 billion 22% Foundry $5.4 billion 16% Other (subsidiaries) $0.6 billion (33%) Data source: Intel. YOY = year over year. Notably, its gross margin, which has been under pressure, saw improvement, up 250 basis points to 39.4%. Adjusted gross margin rose 180 basis points to 41%. Looking ahead, the company projected Q2 revenue to be between $13.8 billion and $14.8 billion with adjusted EPS of $0.20. That was well ahead of the $0.09 in EPS and $13.1 billion in sales that analysts were expecting. Adjusted gross margins were projected to be around 39%. It expects computer demand to be weak in the second half of the year. However, it projects that server CPU demand will remain strong into 2027. Image source: Getty Images. Is the stock a buy? In my view, Intel just happened to be in the right place at the right time, with hyperscalers now scrambling for server CPUs. However, before that, it had been losing share to Advanced Micro Devices (AMD 3.83%) in the server CPU space and just looked out of sorts. The company still has issues with its foundry business, and its valuation is now to the moon, with a forward P/E of 161. I'd stay away and would prefer to play the data center CPU trend with AMD.Read NextApr 27, 2026 •By Daniel SparksWith Intel, AMD, Nvidia, and More Rising Sharply Last Week, Have Chip Stocks Become Overvalued?Apr 24, 2026 •By Joe TenebrusoWhy Intel Stock Skyrocketed TodayApr 24, 2026 •By Howard SmithStock Market Today, April 24: Intel Surges After Q1 Earnings Beat ExpectationsApr 24, 2026 •By Anders BylundThe Dow Is Down While the Nasdaq-100 Soars. Blame the Chips.Apr 24, 2026 •By Daniel Sparks2 Chip Stocks That Have Gone Parabolic This Month.
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Did This Legacy Tech Company Just Become Wall Street's Newest Artificial Intelligence (AI) Darling?About the AuthorGeoffrey Seiler is a contributing Motley Fool stock market analyst covering technology, consumer goods, healthcare, energy, and materials stocks. Prior to The Motley Fool, Geoffrey was a senior equity analyst at Raging Capital Management, a $600 million long-short hedge fund. He holds a bachelor’s degree in history from Haverford College.TMFFindProfitStocks MentionedIntelNASDAQ: INTC$84.96(+2.93%)+$2.42Advanced Micro DevicesNASDAQ: AMD$334.48(-3.83%)-$13.33*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.