Is Intel Stock a Buy After Its Latest Earnings Report?

Intel (NASDAQ:INTC) recently delivered blowout earnings results for the second quarter of 2026.

Adjusted earnings per share of $0.42 came in double what Wall Street analysts had been expecting, while revenue of $16.1 billion came in nearly $1.7 billion higher than consensus estimates.

“Strong demand for our products continue to outpace our growing supply,” Intel’s CEO Lip-Bu Tan said on the company’s earnings call. “The surging demand and rapid build-out of compute infrastructure across the world creates a meaningful opportunity for us in our product business as well as our foundry business.”

Intel also provided strong guidance for the current quarter, estimating adjusted EPS of $0.38 and revenue between $15.8 billion and $16.8 billion. Both came in higher than analysts had been modeling.

The positive news, however, has done little for Intel’s stock, which is down nearly 33% over the past month.

Is Intel a buy after its latest earnings report?

Image source: The Motley Fool.

High capex continues to plague AI stocks

While the top- and bottom-line numbers looked great, Intel also raised its 2026 capital expenditure guidance to $20 billion, up about $2 billion from prior guidance.

Intel’s CFO David Zinsner also said it expects capex in 2027 “to be significantly above the 2026 levels.” Zinsner said Intel remains disciplined with capex and is spending only in areas where it sees good long-term returns.

All artificial intelligence stocks that have raised their capex guides have come under pressure, as investors question whether these massive investments can yield adequate returns.

Some analysts are also concerned that Intel will be forced to raise capital to fund its spending ambitions.

“The prospect of shareholder dilution and continued pressure on free cash flow are likely to weigh on investor sentiment and cap the stock’s upside over the short to medium term,” Hendi Susanto, a portfolio manager at Gabellie Funds, told Barrons.

However, some analysts view the increased capex guidance as evidence that Intel will be able to acquire more customers and see demand flow through.

Is the stock a buy?

Intel’s strong results in the recent quarter have led to a big turnaround for the stock, which is up nearly 128% this year and roughly 335% over the past year.

The question is, how much revenue and earnings growth has the market already pulled forward?

If you were to annualize Intel’s projected adjusted EPS of $0.38, that means Intel still trades at about 59 times forward earnings. On revenue, the valuation looks more reasonable with the stock trading at 7.2 times forward earnings.

Intel falls into the same category as many other AI stocks right now.

The stock took off when investors realized that central processing units (CPUs), a product Intel has always excelled in, play a critical role in AI infrastructure, particularly for powering agentic AI, systems that can carry out autonomous tasks.

But now that the easy money has been made, Intel’s success partly depends on AI demand continuing to ramp. That looks likely this year and next, but even the faintest signs of slowing AI demand could hit many of these stocks hard.

Intel also has a newer Foundry business for chip manufacturing, but the company is still reportedly seeking an anchor customer.

While the pullback in shares over the past month makes Intel stock more reasonable, it still carries risk, so I would start with a small position and dollar-cost average for now.

The stock will do well if AI demand continues to rise, but shares are likely to be highly volatile.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel. The Motley Fool has a disclosure policy.