Intel Stock: Blowout Earnings, But Is It a Buy?

Intel reported stellar Q2 2026 earnings, with adjusted EPS of $0.42 doubling analyst expectations and revenue of $16.1 billion beating by $1.7 billion. CEO Lip-Bu Tan highlighted strong demand for products and foundry services.

However, the company raised its 2026 capital expenditure guidance to $20 billion, up $2 billion, and signaled even higher capex in 2027. This spooked investors, as high spending raises questions about returns and potential dilution.

Despite the earnings beat, Intel's stock is down 33% over the past month, reflecting market concerns about the sustainability of AI-driven growth and the cost of expansion.

Some analysts worry Intel may need to raise capital, diluting shareholders. Others see the capex as necessary to capture future demand. The stock trades at 59 times forward earnings, a lofty multiple.

Intel's earnings show it's a key AI player, with CPUs powering agentic AI. But the market is punishing high capex across AI stocks, fearing overinvestment. Intel's raised guidance adds to that narrative.

For investors, the stock's 128% year-to-date gain means much optimism is priced in. The high P/E ratio leaves little room for error. If AI demand slows, Intel could drop sharply.

On the flip side, Intel's foundry business could be a long-term growth driver if it lands a major customer. The capex might be necessary to compete with TSMC and Samsung.

Short-term, the stock is volatile. The pullback offers a better entry point, but risks remain. Dollar-cost averaging can mitigate timing risk.