Is Intel Stock a Buy as AI Revenue Surges Nearly 60%?
Intel has joined the AI infrastructure party, but that doesn't make its stock a buy.
Overview
Better late than never: Intel (NASDAQ: INTC) has officially joined the artificial intelligence (AI) infrastructure boom, with the company seeing its data center and AI segment revenue surge in the second quarter. Shares jumped in after-hours trading, but Intel gave back those gains after management acknowledged the company would meaningfully increase its capital expenditures (capex) this year. Punishing AI stocks that increase their capex has been a major theme this earnings season.
Intel's stock has now lost about a third of its value from its recent highs. However, its shares are still up more than 150% on the year and over 300% in the past 12 months.
Details
The biggest driver of Intel's growth was data center central processing units (CPUs). Demand for server CPUs has increased in the second quarter on a sequential basis and management expects double-digit industry growth both this year and next, with momentum continuing into 2028. Meanwhile, demand continues to far outstrip supply, leading to higher CPU prices across the board.
Source
Originally published at www.fool.com.