Intel Corporation INTC has enjoyed a dream run this year, and its shares climbed more than 15% last week. The surge was prompted by reports that the company reached a preliminary deal to manufacture some chips for Apple Inc.’s AAPL devices.
What the Deal Means
The deal comes as part of the United States’ push to boost microchip production. It indicates a major boost to Intel’s chip production throughout the year. Apple is one of the leading consumer electronics companies in the world, and high demand for its products means a steady requirement for chips, which is likely to boost chip supply from Intel.
The U.S. government became the largest shareholder of Intel last year and played a key role in bringing Apple and Intel together.
Steady Performance by Intel
The Lip-Bu Tan-led company’s first-quarter 2026 earnings revenues improved significantly both sequentially and from the year-ago levels. The company reported quarterly earnings of $0.29 per share, beating the Zacks Consensus Estimate of $0.01 per share. Intel’s revenues totaled $13.6 billion, up 7% year over year.
Intel’s net loss (GAAP) of $4.8 billion widened in the first quarter of 2026 from $887 million in first-quarter 2025. However, robust data center demand and AI growth have been going in favor of the company. Intel’s foundry business grew 16% to $5.42 billion, while the data center division grew 22% to $5 billion.
Intel gave a revenue forecast of $13.8 billion to $14.8 billion for its second quarter.
Intel’s stock has soared 226% year to date and has more room to grow as the company continues to maintain focus on its AI-centric products.
Why You Should Hold Intel Now
Intel’s net profit slowed in the first quarter, with the company reporting trailing 12-month (TTM) figures with a negative margin of 5.9% in comparison to the Zacks Semiconductor General Industry’s 52.5%. Intel currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Large spending on manufacturing expansion and restructuring costs has significantly weighed on recent net earnings. While these factors present near-term challenges, Intel’s long-term strategic initiatives remain intact. Thus, maintaining a hold position on the stock seems appropriate at this stage.
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This article originally published on Zacks Investment Research (zacks.com).
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