The Comeback Kid? Where Will Intel Be in 1 Year?

Rocky is a classic movie and one of my all-time favorites. Sylvester Stallone and Carl Weathers are great in it, and the soundtrack is legendary. Plus, who doesn't love a good underdog story?

Well, a few months ago, I wasn't so sure Intel (NASDAQ: INTC) had a Rocky-style comeback in it. I thought, with a high degree of certainty, that it was an over-the-hill company doomed to lose its title to its younger and more innovative competitors.

But, in light of the company's first-quarter 2026 results, I think I might have been wrong. This old dog still has some fight in it yet.

Image source: Getty Images.

Intel didn't hear no bell

The core of Intel's business has historically been chip design and manufacturing. It used to be Apple's go-to chip producer, but it lost that contract in 2020 and since then, its revenue had been on a decline and its margins have been shrinking.

And while the company's net margin is still negative, its gross margin is up slightly from where it was at the end of 2025, and the company's revenue appears to be on the mend.

Intel's revenue for the quarter ended March 28 totaled $13.6 billion, up 7.2% year over year and $1.4 billion over the company's prior outlook.

Its gross margin for the quarter was 41%, up 1.8 points year over year and 6.5 points above the outlook.

Finally, Intel's earnings per share (EPS) was $0.29, up $0.16 year over year and much better than its projection to just break even.

The bulk of that revenue growth seems to have come from the company's data-centric artificial intelligence (AI) segment, which grew 22% over Q1 2025, and the company's foundry segment, which was up 20% sequentially.

The counterpuncher

That's in line with Intel's pivot toward being a semiconductor foundry company for other companies. More like a Broadcom or Taiwan Semiconductor Manufacturing than what it has been in the past.

On April 8, Intel signed a multibillion-dollar contract to produce Amazon's custom AI chips, and that caused Intel's shares to climb more than 3% when the news broke. According to IDN Financials, Intel is also in talks to do the same thing for Alphabet, Google's parent company.

In addition, Intel is currently involved in a $100 billion plan to build more chip factories in the United States. It's likely why the U.S. government bought $8.9 billion worth of Intel stock last August.

And, though it's still early, it seems like Intel's pivot toward becoming the Taiwan Semiconductor Manufacturing of the Western Hemisphere is beginning to pay off.

While it might not be anywhere near knocking out its Taiwanese competitor, Intel certainly has a better chance of going the full 15 rounds like Rocky Balboa did with Apollo Creed.

So, where will Intel be in a year? It's difficult to say, but at this early stage, it appears that it will likely be in a better place than it was in Q1 2025.

If Intel manages another quarter or two like this one then it will be worth looking into some long-term price projections. But as it stands, Intel has more fight in it than I thought.

James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.