Did The Market Read Intel Right?
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Intel (INTC) stock returned 136.3% in the year to October 26, 2026, compared with 14.3% for the S&P 500. The company’s latest report during that period arrived on July 23 for fiscal Q2 2026. Two areas of Intel’s business warrant a close look: its data center chips and its chip-making unit, Intel Foundry. So has Intel’s business changed as much as its share price?
Intel’s Data Center Sales Are Growing Fast
Part of the business has changed, beginning with data center chips. Management said on the July 23 call that Intel’s data center sales reached $6.3 billion in fiscal Q2 2026, up 59% from a year earlier. That marks a different pace from fiscal 2025, when the same business grew 4.9% for the full year.
The shift also extends to the whole company’s profit from operations. Intel posted a 12.2% operating margin in fiscal Q2 2026, compared with an operating loss equal to 10.0% of revenue in fiscal Q2 2025. Management said on the call that this was the seventh quarter in a row that Intel beat its own financial expectations.
Intel Foundry Is Still Losing Money
The loss is shrinking, but it is still large. Management said Intel Foundry lost $2.1 billion at the operating level in fiscal Q2 2026, which was $348 million less than in the preceding quarter. Management also said factory output on Intel 18A, the process behind the company’s Core Ultra Series 3 processors, ran about 25% above target.
Outside customers still represent a small portion of the unit’s sales. They paid $293 million of Intel Foundry’s $5.8 billion in revenue that quarter, meaning the foundry still produces mostly for Intel itself. On the same call, management raised its 2026 capital spending outlook to more than $20 billion, citing strong customer demand signals. So the spending is rising before outside customers have become a large part of the foundry’s sales.
How Much Are Investors Paying For Intel Now?
Investors now pay 8.1 times Intel’s sales, compared with 3.2 times for the S&P 500. Intel traded at 1.8 times sales at the end of June 2025, when the stock closed at $22.40, before the rally began that summer.. Some of the rally has already reversed: Intel stock fell 26.4% from September 25 to October 26, 2026, while the S&P 500 slipped 0.8%.
That multiple represents a price for revenue, not for profit. If data center growth slows or the foundry loss stops shrinking, investors are left paying well above the market’s multiple for sales that do not yet produce a net profit.
Intel’s latest results show fast data center sales growth alongside an Intel Foundry unit that is losing less but still losing money. So the business has changed, but less than the share price: investors pay 8.1 times sales for a company that still posts a net loss. Intel Foundry’s operating loss is the number to watch in each of Intel’s quarterly reports. The company still reports a net loss, posting $11.0 billion in fiscal Q2 2026 against $2.92 billion a year earlier. That loss came from items below operating profit, since Intel earned $1.97 billion from its operations in the quarter.
How To Act On INTC?
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