To The Moon

The setup going into tonight is more loaded than any Intel earnings in recent memory, and not just because the stock is up 278% year to date. Two days ago Intel landed its first publicly named external foundry customer under CEO Lip-Bu Tan, Fortinet's SP6 security chip on Intel 4 process, and the stock surged 8.64%. It is now sitting at $102 to $105, down 2.68% today as the market takes profits ahead of the print. Options traders are pricing a 13 to 15% move in either direction. That is the 94th percentile of implied volatility over the past year. The market is treating this as a genuine binary, and it is right to do so.

The reason is simple. Intel's transformation under Lip-Bu Tan is either real and beginning to compound, or it is still a restructuring story without foundry economics to back it up. Tonight's print plus guidance is the first hard evidence either way since Q1 beat estimates for the sixth consecutive quarter.

What Lip-Bu Tan Has Actually Delivered Since March 2025

The narrative around Intel is easy to summarise and hard to verify without looking at the actual numbers. So here they are.

Q1 2026 revenue was $13.6 billion, up 7% year on year from $12.7 billion, and well ahead of the roughly $12.36 billion Wall Street had modelled. That was the sixth consecutive quarter of revenue above management's own expectations, which is a meaningful streak for a company that had been serially disappointing before Tan took over. Adjusted EPS was $0.29, up from $0.13 a year earlier. Adjusted net income increased 156% to $1.5 billion. Operating profit margin improved to 12.3% from 5.4%. Adjusted R&D and administrative expenses were down 9%, showing genuine cost discipline. Global headcount has been reduced from 125,000 at end of 2023 to 85,000 at end of 2025, a 32% reduction.

The Data Center and AI Group revenue was $5.1 billion in Q1, up 22% year on year. AMD's data-centre revenue overtook Intel's for the first time in Q1 at $5.8 billion versus Intel's $5.1 billion, which is worth noting, but Intel's direction is up while the gap is closing rather than widening at the rate it was two years ago.

The GAAP picture remains complicated. Intel posted a GAAP net loss of $3.7 billion in Q1, a loss of $0.73 per share, driven by restructuring charges. The non-GAAP story is the recovery thesis. The GAAP story is still a company absorbing significant transformation costs. Both are true simultaneously, and which one you emphasise determines whether you are bullish or cautious.

The Fortinet Deal: What It Actually Means

The Fortinet announcement two days before earnings is either a genuine strategic milestone or a carefully timed signal designed to give the stock momentum into the print. The most likely answer is both, and separating them matters.

What it actually is: Fortinet will use Intel's foundry to produce its SP6 next-generation security processor on the Intel 4 process. This is the first named external foundry customer under Lip-Bu Tan's leadership. Tan had told CNBC in May that multiple customers were working with the foundry but it was his personal policy not to name them. Naming one two days before earnings is not a coincidence.

What it is not: it is not evidence of a foundry business generating meaningful revenue. External foundry revenue was just $174 million in Q1 2026. A single Fortinet chip design win does not change that number materially in the near term. The bull case for Intel Foundry runs through 18A adoption by large customers, not through individual security chip contracts. The Fortinet deal is directional proof, not financial proof.

The Ohio fab operating partner search adds another dimension. Intel is actively seeking an external operating partner for its Ohio fab, which suggests the company is open to sharing control of that facility to attract customers who want TSMC-style operational separation between their foundry supplier and a competitor. That is a structurally important signal about how seriously Tan is taking the customer concerns that have historically made fabless chip companies reluctant to use Intel as their manufacturer.

What Tonight's Numbers Need to Show

Revenue guidance for Q2 was up to $14.8 billion. Analyst consensus sits at $14.40 billion, with EPS consensus of $0.10 per share based on some estimates and $0.22 per share on others, reflecting a genuine range depending on restructuring charge assumptions. Intel itself guided for $0.20 non-GAAP EPS. The consensus sits only slightly ahead of that guidance, which is actually a setup for an easy beat if execution holds the Q1 pattern.

TSMC's strong earnings last week act as a positive read-through. TSMC reported results that signal robust semiconductor demand generally, which benefits Intel's chip business even independent of the foundry turnaround. Motley Fool flagged this as a major buying signal specifically because TSMC's demand commentary implies Intel's CPU volumes should be tracking well.

Intel also confirmed it is increasing CPU prices due to tight supply. That is a pricing signal the bull camp is treating as meaningful because it implies demand exceeds supply at current volumes, which is the opposite of the competitive narrative that AMD was winning every data centre socket. Tight supply on CPUs means Xeon is still moving.

The four specific lines to watch tonight per TipRanks and other preview analysis: external foundry revenue (was $174 million in Q1, any sequential growth matters), 18A yield progress commentary, Q3 guidance versus the $14.8 billion Q2 run rate, and any new foundry customer names beyond Fortinet.

The 18A node is the most critical long-term variable. 18A includes RibbonFET transistors and PowerVia backside power delivery, Intel's attempt to leapfrog to process leadership rather than just closing the gap with TSMC and Samsung. Reports in mid-July suggested 18A might not reach profitable yields until late 2026 or 2027, which contributed to the 27% pullback from Intel's June high. Any update tonight that either confirms or refutes that yield timeline will move the stock significantly, potentially more than the revenue number itself.

The Bear Case Is Not Dead

Intel is up 278% year to date and 163% in 2026 alone, making it the top-performing large-cap chip stock this year. It is currently trading below its 50 and 100-day EMAs after the recent pullback. The stock has retraced 17% from its June peak even before tonight's print.

At $102 to $105, Intel is not cheap on traditional metrics given the ongoing GAAP losses. The entire bull case rests on the foundry transformation delivering external revenue at scale, which requires: 18A achieving profitable yields on schedule, winning large fabless customers who currently use TSMC exclusively, maintaining credibility as a neutral foundry partner rather than a competitor to those same customers, and doing all of this while simultaneously running a competitive CPU and GPU business against AMD and NVDA.

AMD overtook Intel in data centre revenue for the first time in Q1. AMD's EPYC server chips continue to gain socket share. Intel's Panther Lake CPU, which will be the first major product manufactured on 18A, is targeted for this year, but any delay in that product would extend the period during which the foundry thesis is aspirational rather than validated.

The operating partner search for the Ohio fab is positive and negative simultaneously. Positive because it signals customer-friendly restructuring. Negative because it implies the facility cannot attract customers without fundamentally changing who controls it, which raises questions about how quickly Intel Foundry can scale without operational changes of that magnitude at every facility.

External foundry revenue of $174 million in Q1 against total Q1 revenue of $13.6 billion means the foundry business is currently 1.3% of total revenue. The stock is priced for that number to be 10 to 20% of revenue in three to four years. That is the gap between today's reality and the thesis investors are paying for.

The Google Cloud Collaboration

The expanded AI collaboration with Google Cloud announced Tuesday alongside the Fortinet deal is worth noting specifically. Google is one of the largest hyperscale buyers of AI compute globally. A deepening relationship with Intel on AI workloads, even if it currently means Google running workloads on Intel CPUs rather than using Intel Foundry for chip manufacturing, creates a reference customer and a revenue relationship that could evolve toward foundry engagement as 18A matures.

This is the part of the Intel transformation that is hardest to value and easiest to discount. The bull case requires believing that the Google relationship, the Fortinet deal, and Tan's statement about unnamed customers working with the foundry collectively represent the early stages of a customer roster that will look very different in 2028. The bear case requires believing that individual customer announcements at low revenue levels do not constitute a pattern, and that TSMC's dominance is too entrenched to disrupt without something Intel has not yet demonstrated it can deliver.

The Trade Framework

Tonight's setup is as clean a binary as any earnings report this quarter. The stock has the momentum of the Fortinet announcement, the TSMC positive read-through, and six consecutive quarters of beating estimates. Against that, options are pricing the largest implied move in twelve months at 13 to 15%, the stock has pulled back 17% from peak, and the foundry thesis is still measured in hundreds of millions of dollars rather than billions.

Bull scenario: revenue at or above $14.8 billion, non-GAAP EPS beats $0.22, any new foundry customer named beyond Fortinet, 18A yield update that does not extend the timeline, Q3 guidance above $15 billion. In this scenario INTC breaks above $110 to $115 resistance and the transformation narrative gets its first financial confirmation.

Bear scenario: revenue misses $14.4 billion, 18A yield challenges confirmed as extending into 2027, foundry revenue flat or down from $174 million, Q3 guidance below $14 billion. In this scenario the stock breaks below $89 support and the 278% YTD gain starts attracting serious profit-taking.

The honest pre-earnings position: Intel at $102 after a 278% YTD run has significantly more expected volatility than typical large-cap earnings. A 15% implied move means the market is pricing the outcome of the transformation bet, not a quarterly revenue miss. If you hold from lower levels, tonight is a trim-or-hold decision rather than a build decision. If you are considering a new entry, entering ahead of a 15% binary with the stock up 278% YTD is a momentum trade, not a value trade. Know which one you are making.

I am not a financial advisor. Trade wisely, Comrades.