Intel Corporation (NASDAQ:INTC) has gained about 143% over the past year, but can the stock keep rising amid AI slowdown fears? It ranks ninth on our list of the top 10 stocks Jim Cramer and billionaire Ken Fisher like. Intel reports third-quarter results on October 29 after the market closes. We look at the bull case, the bear case and what the report has to show.
Bulls: Customers Want More Server Chips Than Intel Can Make
Bulls say demand for Intel’s data center chips is running ahead of what the company can build. The evidence is management’s own comments. On its second-quarter earnings call on July 23, Intel said the industry faces one of the most severe supply shortages in its history, across advanced chip wafers, memory and substrates, and that the shortages will last for the foreseeable future. It also said supply growth will come late in the third quarter and into the fourth, especially for servers.
The results show that demand. Data center and AI revenue grew 59% from a year earlier in the second quarter, and the segment’s operating margin rose to 39.5% from 16.1%. For the first time in a while, the segment earned more operating profit than the PC business. There is another catalyst behind that growth, which is the demand for CPUs versus GPUs. Click to see the industry details and bull case here.
Bulls also see pricing power. On the same call, CFO David Zinsner said the PC business beat expectations largely because of higher average selling prices. Intel raised prices to pass on higher costs, even though management expects the PC market to shrink by low double digits this year because of memory prices.
Bulls: The Foundry Loss Is Shrinking
Intel’s factory business still loses money, but the loss is getting smaller. Its operating margin improved to minus 36.2% from minus 71.7% a year earlier. Output from its 18A manufacturing process ran about 25% above target. Intel says it has cut the cost of its main Panther Lake chip by roughly 50% this year, with another 20% planned by year-end. If the losses keep shrinking, consolidated earnings improve even without a big new customer. Check out an investor letter on Intel’s 18A progress.
Bears: The Price Assumes Years of Growth
Bears start with the price. Intel trades at about 60 times forward earnings, and analysts disagree on what it will earn, with 2028 estimates ranging from $1.97 to $5.46 per share. The stock also falls hard when AI sentiment turns. It has dropped about 24% over the past month, while TSMC fell about 6% over the same period. Click to read the full bear case here.
Bears: Spending Is Outrunning Cash
Intel’s spending is rising faster than its cash. On the same call, management raised the 2026 capital spending plan to more than $20 billion and said 2027 will be significantly above 2026. Adjusted free cash flow was negative $8.4 billion in the second quarter. Management said positive cash flow could be challenging in 2027 and left open the possibility of raising money in the capital markets.
Bears: Outside Customers Are Still Missing
External foundry revenue was only $293 million in the second quarter, so the factory business mostly makes chips for Intel itself. Two news items raised more doubts. Elon Musk said he is in talks with TSMC about Terafab, the chipmaking project Intel joined as a development partner in April, and CEO Lip-Bu Tan confirmed that Intel stays in. That raises questions about foundry customers. Separately, the cloud startup Modal received its first server with Nvidia’s Arm-based Vera CPU, which showed twice the throughput of x86 chips on AI agent workloads in early tests. That raises questions about demand for Intel’s own server CPUs.
What Intel Has to Show on October 29
Analysts expect about $16.47 billion in third-quarter revenue and $0.40 in earnings, close to Intel’s own guidance. Over the past 90 days, they made 30 upward earnings revisions and 34 upward revenue revisions, and none downward, so a beat of a few hundred million dollars may not impress. The fourth-quarter outlook matters more, with analysts expecting about $16.9 billion in revenue and $0.40 in earnings. Management wants gross margin to stay comfortably in the 40s each quarter, but Panther Lake and Granite Rapids, now a bigger part of sales, carry margins below the company average. Investors will also watch capital spending, the new share count and how management answers questions about Nvidia’s Vera chip.
Big investors are paying attention too. Maverick Capital pitched Intel as a long idea at the Robin Hood conference on Wednesday, traders said. Another demand signal comes from advanced packaging. Click to read our packaging report.
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