Intel’s first-quarter revenue was up 7% year over year, while gross margin was 39.4%, an increase of 2.5 percentage points from Q1 2025.

Artificial intelligence is “moving into the real world” toward applications like “agentic, physical AI, and robots and edge AI,” CEO Lip-Bu Tan said on an April 23 earnings call. He said the shift has started to drive strong demand for central processing units, including the company’s x86 ecosystem.

Intel’s Q1 results “demonstrate continued and steady progress across the business, reflecting strong demand for our products and disciplined execution to expand available supply,” Tan said on the earnings call. He added that revenue, gross margin and earnings per share were all above the high end of guidance, and that the company has exceeded financial expectations for the sixth consecutive quarter.

According to Tan, demand continued to exceed supply in Q1 for all of Intel’s businesses, especially for Xeon server CPUs. A CPU-anchored architecture remains the “backbone of AI computing in production,” he said, which is “a structural reason I am confident that CPU franchise will continue to be a meaningful growth engine for the company in the years ahead – not just the quarters ahead.”

“Intel is now a very different company than when I first joined over a year ago,” Tan said. “We have taken, and continue to take, deliberate steps to rebuild Intel into a more competitive and more profitable company.”

The Client Computing Group unit earned $7.7 billion in revenue in Q1, down 6% sequentially but up 1% year over year. Data Center and AI earned $5.1 billion, up 7% sequentially and 22% year over year.

Tan highlighted several developments in Q1, including progress with Intel Foundry, which expanded advanced packaging and testing capacity at a facility in Penang, Malaysia. Although the foundry’s initial results are encouraging, realizing its full potential will be a “long journey,” he said.

Intel Foundry earned $5.4 billion in Q1 2026, an increase of 20% sequentially and 16% year over year. The foundry had an operating loss of $2.4 billion; this was a slight improvement of $72 million quarter over quarter, Zinsner said.

Tan also cited a multiyear collaboration with Google on AI infrastructure. According to a press release, the agreement calls for continued use of Intel’s Xeon processors in Google Cloud infrastructure across AI, inference and general-purpose workloads. The deal “reinforces the central role of CPUs and [infrastructure processing units] in modern, heterogeneous AI systems,” the release said.

In addition, Tan pointed to Intel’s partnership with Elon Musk-owned SpaceX, xAI and Tesla, announced on X earlier this month. Under the deal, Intel will join Musk’s Terafab project to help build custom-designed chips.

“Elon and I share a strong conviction that global semiconductor supply is not keeping pace with the rapid acceleration in demand,” he said. “We are excited to explore innovative ways to ‘refactor’ silicon process technology – looking for unconventional ways to improve manufacturing efficiency that will eventually lead to a dynamic improvement in the economics of semiconductor manufacturing.”

Looking ahead, the company expects second-quarter revenue between $13.8 billion and $14.8 billion.

“Q1 was a strong quarter financially and operationally,” Zinsner said. “All demand signals continue to emphasize the growing and essential role of the CPU in the AI era and the unprecedented demand for leading edge wafers and advanced packaging.”

By: DocMemory
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