The AI PC story is gaining speed, with global semiconductor revenue expected to surpass $1 trillion for the first time in 2026. This jump is primarily driven by strong demand for AI, with the Computing and Data Storage segment alone expected to grow 41.4% year-over-year to surpass $500 billion. On top of that, Gartner expects global AI spending to reach $2.59 trillion in 2026, a 47% increase from the previous year.
Intel (INTC) doesn’t want to be left behind in that type of market. It is pushing major PC makers in the US, China and Taiwan to move to its more advanced 18A process chips, including the Panther Lake and Wildcat Lake platforms, as demand for top-tier processors begins to outstrip supply in top manufacturing nodes.
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Wedbush Securities sees this as a smart way for Intel to protect its margins by guiding customers toward higher-value, premium-priced chips.
Will this proactive push towards next-generation chips finally deliver the sustainable margin expansion and revenue growth that investors crave, or is it simply a tactical defense in a hyper-competitive market?
Intel’s messy earnings outlook
Intel is headquartered in Santa Clara, California, and designs, manufactures and sells microprocessors, chipsets and related computing platforms for PCs, data centers and newer artificial intelligence-focused devices worldwide.
INTC has a year-to-date (YTD) gain of 220.26% and a 52-week return of 471.17%.
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The company now has an equity value of $598 billion, and its trailing price-to-earnings multiple of 1,846.67 times and trailing price-to-cash-flow multiple of 59.91 times are well above the industry medians of 25.06x and 18.35x.
Its latest quarterly report, for the period ending March 26, showed revenue of $13.58 billion versus analyst estimates of $12.39 billion, marking year-over-year growth of 7.2% and a year-over-year pace of 9.6%. It also delivered adjusted earnings per share of $0.17 versus an estimate of -$0.10, delivering a surprise of +270.00%.
INTC posted adjusted operating income of $1.67 billion, versus an analyst estimate of $397.4 million, and Intel turned that into an adjusted operating margin of 12.3%, suggesting the mix of high-end products is already helping.
It’s also clear that the underlying numbers remain confusing. Operating margin was -23.1% in March 2026, compared to -2.4% in the same quarter last year. The company reported net income of -$3,728 million, with net income growth of -530.80%.
Intel generated $1,096 million in operating cash flow, down 88.70%, and its net cash flow was $2,983 million, down 53.85%. This is why Intel’s push to steer PC makers toward its latest chips is so important, because better mix and pricing are some of the few levers it can quickly pull to support those bottom line finances.
Intel relies on new partnerships and chips
Intel’s push for PC makers to use its latest chips builds on the recent launch of its Core Series 3 processors, which are intended to bring AI-ready performance to small businesses, schools, and budget-conscious users. These chips are designed to power AI-enabled PCs with better day-to-day performance and efficiency, supporting up to 40 TOPS platforms, and delivering clear gains over older machines, smoothly guiding customers toward newer, higher-value systems.
That same strategy is reflected in its long-term work with Alphabet’s (GOOGL) on infrastructure. Under a multi-year agreement, Google continues to use Intel’s Xeon processors as the two companies jointly develop custom infrastructure processing units that scale networking, storage and artificial intelligence workloads at massive scale.
Additionally, Intel has gone from being seen as a “market reject” to landing a key role in AI with Elon Musk’s companies. Its involvement in Musk’s Terafab project, a massive semiconductor and AI campus aimed at supporting Tesla (TSLA), SpaceX and xAI with advanced 14A process manufacturing, has helped reposition Intel’s foundry division as a more credible partner in the AI supply chain.
The brand is also gaining more visibility in high-performance environments. Intel was recently named the official computing partner of McLaren Racing in Formula 1, IndyCar and sim racing. Its Xeon and Core Ultra processors will power everything from aerodynamic simulations to race day strategy analysis.
All of these moves feed into the same story that Intel is telling PC makers that the future is in its newest platforms, and that’s where performance, partnerships, and pricing power now lie.
Analysts weigh Intel’s margin story
Intel’s next big checkpoint is scheduled for July 23, when it is scheduled to release earnings for the June 2026 quarter. In the next report, the Street expects average earnings of $0.10 per share, compared to -$0.26 a year ago. That equates to an estimated year-on-year growth rate of 138.46%.
These higher expectations align with the growing interest of large investors. During the first quarter of 2026, Chase Coleman’s Tiger Global Management, one of Wall Street’s most followed hedge funds, quietly built a new position in Intel. The fund purchased 1,638,700 shares, a stake valued at approximately $180 million according to its most recent 13F filing.
Even with that kind of support, the broader analyst group remains cautious. The stock has a “Hold” consensus rating from 44 analysts, showing that the Street is not ready to consider Intel’s margin recovery complete. The average price target is $87.54, well below the current stock price and implies approximately a 26% downside.
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Conclusion
Intel’s push to get PC makers to use its newest chips seems like a real, if imperfect, way to support margins rather than just a flashy headline-grabbing move. Fundamentals still need to improve, but a better product mix, a tighter offering, and more AI-related deals point to earnings and cash flow slowly improving from here. In that type of setup, the stock seems more likely to cool off or move sideways than to crash, and the next few quarters will be key to proving the margin story in actual numbers.
As of the date of publication, Ebube Jones had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
