**Intel Corporation (INTC) reported a robust second quarter for 2026, with revenue increasing by 25% year-over-year to $16.1 billion. Adjusted earnings reached $0.42 per share, surpassing expectations. The company also experienced a non-GAAP gross margin expansion to 41.8%, driven by improved manufacturing execution and a better product mix. Key sectors such as Data Center and AI revenue surged by 59%, indicating strong demand for Xeon processors and enterprise AI infrastructure.**
**Despite its recovery and growing AI demand, Intel faces challenges in scaling its foundry business and managing high capital investments. Adjusted free cash flow remains negative due to elevated capital expenditures, highlighting the importance of maintaining financial discipline as the company expands its manufacturing capabilities and product portfolio. Intel’s stock now holds a Zacks Rank #1 (Strong Buy) with a 12-month price target of $115.50, contingent on successful execution of its AI roadmap and manufacturing improvements.**
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