Intel Shares Soar 27% After Confirming 'Unprecedented' Agentic AI Demand for CPUs. Here Are the Biggest Takeaways from Earnings.
When most of Wall Street and the mainstream media held a stale, skeptical fundamental view on Intel, Key Context was very bullish on Intel shares.
Sell-side analyst notes this morning are filled with explanations on why they got Intel wrong.
Forgive me for a little horn tooting. Intel is a great example of why my decades of following the semiconductor industry, understanding the technology, tracking investor/media perceptions/positioning, and recognizing major secular computing shifts give me an advantage.
When most of Wall Street and the mainstream media held a stale, skeptical fundamental view on Intel, Key Context was very bullish on Intel shares. Next to Credo stock, which is also up 80% since I made the positive call, Intel has been our best call thus far.
Let’s look at what I wrote:
On March 12th: “CPUs are the next big AI winner. I’m not joking.” “I believe Intel and Advanced Micro Devices CPU demand is soaring and the demand will remain durable thanks to big upgrade cycles for x86 servers and the growing need for more CPUs to handle AI agent inference.”
On March 24th: “Intel and AMD stand to benefit as the largest providers of server CPUs.”
“Macro and geopolitical risks aside, chip demand is only going higher as agentic AI drives exponential token growth. I wouldn’t overthink it. Arm still has large exposure to mobile smartphones and its CPU ramp is years away. x86 still dominates server CPUs and the software ecosystem. Remember, even Nvidia is still using x86 CPUs for its new Groq 3 LPX inference rack.
I still believe the best way to play the massive server CPU shortage in 2026 is with Intel and AMD.”
On March 30th, I wrote again: “While GPUs have occupied the spotlight, we are now seeing a massive CPU shortage driven by the need for agentic AI orchestration. Companies like Intel and AMD are seeing surging demand because every AI agent requires CPUs to manage a rising number of scheduling tasks, web searches, code execution, and database queries. Intel’s CFO has said they are discussing three-to-five-year supply agreements with hyperscalers, which speaks to the durability of demand.
The infrastructure math is changing rapidly. Just a year ago, each gigawatt of AI data center capacity required roughly 30 million CPU cores. Today, Arm’s Haas says the number has quadrupled to 120 million cores to support the orchestration of AI agents.”
“CPU Shortage from Rising AI Agent Orchestration Demand
I still believe the best way to play the massive server CPU shortage in 2026 is with Intel (INTC) and AMD (AMD) as x86 still dominates CPUs with its software ecosystem.”
I then went on TBPN and said: “the biggest underlying thing that isn’t consensus yet: the massive CPU shortage that we’re seeing.” “”We’re going to see this massive demand for CPUs that people aren’t really understanding yet. Because AI agents — the whole thing — require orchestration, tool calls, database queries, web searches. That’s all handled by the CPU.”
Our ideas are long-term and fundamentally oriented. We generally don’t call quarters because positioning may dominate and the market can ignore underlying fundamentals in the short term.
But Intel’s first-quarter numbers last night and management commentary made even the hardest skeptics realize there is a solid and durable fundamental story here and the stock is re-rating much higher for good reason.
Intel delivered strong financial results and gave a much better-than-expected outlook for the current quarter.
-Q1 revenue was $13.6 billion versus $12.4 billion estimate. EPS 29 cents versus 2 cents consensus.
-Q2 revenue outlook range was $13.8 billion to $14.8 billion vs. $13.1 billion estimate
Here are the most important takeaways from the Intel earnings and the investor conference call late Thursday – including “Tae’s Take” at the end:
