Intel (NASDAQ:INTC) Rally Puts AI Strategy In Focus

KUALA LUMPUR, 31 JULY 2026 —

Intel Corp.’s latest quarterly results sent its shares up 8.3% on Thursday, lifting the Nasdaq Composite, after revenue rose above analysts’ estimates and data-centre demand firmed.

“This is the first quarter in a long time where demand across multiple franchises is stabilizing,” said one senior semiconductor analyst at a top U.S. brokerage who covers Intel. “The data-centre rebound is real, and enterprise spending is picking up.”

Artificial intelligence is the catalyst. Cloud providers and large enterprises are installing additional servers to run inference workloads for AI models, a task that still relies heavily on general-purpose CPUs for orchestration, security and data preparation. Intel estimates that more than 70% of AI inference cycles are executed on x86 processors, giving it a structural advantage as hyperscalers expand capacity.

The company is also embedding AI into its own operations. A tie-up with Synopsys Inc. will use electronic-design-automation software to accelerate the development of Intel’s 18A and 20A process nodes, cutting months from the design cycle. “AI-driven design tools are going to shorten the path from tape-out to high-volume manufacturing,” said a Synopsys executive.

Investors are focusing on the data-centre segment, which grew 15% year-over-year and now accounts for 42% of total revenue. Management guided for mid-single-digit sequential growth in the current quarter, citing sustained cloud build-outs and early enterprise refresh cycles.

Yet the recovery remains fragile. Intel’s foundry services—Intel Foundry—burned $7 billion in the first half and is expected to lose roughly $12 billion for the full year, according to a person briefed on internal forecasts. The unit must raise yields on its 16-nanometre and 3-nanometre test lines while fending off TSMC Ltd. and Samsung Electronics Co. for advanced packaging orders.

Restructuring is also incomplete. The company plans to cut an additional 5,000 roles by the end of 2025 as it consolidates assembly-test operations in Malaysia and Vietnam. The exercise is part of a $10 billion cost-reduction program announced in January.

“The stock is pricing in a lot of good news,” said a fund manager who owns Intel shares. “Execution risk in foundry and the durability of PC demand are the two variables that could swing the story.”

Related: Intel