To The Moon

$Intel(INTC)$’s second-quarter results demonstrated a meaningful operating recovery: revenue accelerated, gross margin improved and data-centre sales surged. However, the company is committing more capital to manufacturing before its foundry business has conclusively demonstrated that it can generate acceptable returns.

Intel reported the results after the market closed on July 23 for the quarter ended June 27. Revenue increased 25% to $16.1 billion, representing the company’s strongest growth in more than 15 years. Non-GAAP earnings reached $0.42 per share, while operating cash flow improved to $7 billion. Intel’s official second-quarter release provides the results.

The segment figures were encouraging. Client Computing and Physical AI revenue increased 13% to $8.9 billion. Data Center and AI revenue rose 59% to $6.3 billion, while Intel Foundry revenue increased 31% to $5.8 billion before intersegment eliminations.

Gross-margin recovery was another bullish signal. GAAP gross margin rose from 27.5% to 40.4%, while non-GAAP gross margin increased from 29.7% to 41.8%. Higher factory yields and shorter production cycle times allowed Intel to deliver more volume than expected.

The bearish issue is that most foundry revenue still comes from Intel’s own product divisions. Internal transfers demonstrate manufacturing activity, but they do not prove that external customers are willing to commit high-volume production to Intel’s fabs.

Management is increasing investment in equipment, clean-room space and substrates to support anticipated demand. This could strengthen Intel’s position in advanced manufacturing and packaging, but it also creates utilization risk. Semiconductor factories carry high fixed costs; if external orders fail to materialize, low utilization can quickly damage margins and free cash flow.

Intel also recorded an $11 billion GAAP net loss, or $2.16 per share, despite reporting $2.2 billion of non-GAAP income. The large difference underlines why investors should examine the adjustments rather than relying only on headline adjusted earnings.

Management expects third-quarter revenue of $15.8 billion–$16.8 billion, non-GAAP gross margin of 42% and non-GAAP earnings of $0.38 per share.

Intel closed at $91.67 on July 27, below its previous close near $92.31. The stock is consolidating after its post-earnings repricing.

INTC’s daily chart has shifted from a pre-earnings bullish setup into a clearly weaker structure, with the stock breaking below the $98–$100 support zone and continuing to print lower highs and lower lows. That former support now becomes the first major resistance, while $113–$114 is the next higher supply area if the stock eventually recovers. With price around the low-$90s, the immediate downside risk is a move toward the large unfilled gap between roughly $69 and $80, although the stock may first attempt to stabilize around $88–$90.

Because the post-earnings decline is already extended, chasing puts at the current level offers poor risk-reward; the cleaner setup would be to wait for a weak rebound into $98–$100 and, if price is rejected, consider a 45–60 DTE $95/$80 put debit spread. A sustained daily close back above $100 would weaken the bearish thesis, while a close above $114 would indicate a more meaningful trend reversal.

The evidence leans moderately bullish because revenue, data-centre demand, yields and gross margins improved together. The thesis would be invalidated by foundry losses remaining structurally high, external customers delaying commitments, capital expenditure weakening cash flow or margins failing to continue recovering. This is personal opinion for education and is not financial advice.

@Tiger_SG @Tiger_comments @TigerStars @TigerClub @CaptainTiger @Daily_Discussion

Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.