Has Lip-Bu Tan’s Magic Worn Off? Intel Just Gave Back Its Gains

Intel (NASDAQ:INTC) astatine $127 looks similar a wait-and-see. After a twelvemonth that saw the banal emergence from astir $22.40 to astir $140, Wednesday's 9% single-day driblet is the archetypal existent ace successful the Lip-Bu Tan turnaround narrative.

Intel is trying to go a leading-edge foundry, an AI infrastructure supplier, and a nationalist concern argumentation plus each astatine once. Since Tan took over, the institution has strung unneurotic six consecutive quarters of gross supra expectations, secured a $5 cardinal equity concern from NVIDIA (NASDAQ:NVDA), a $2 cardinal involvement from SoftBank, and a U.S. authorities ownership presumption that pushed the banal up 278.4% twelvemonth to date. Then momentum stalled. Since May, the banal has drifted, and this greeting it gave backmost a chunk of gains successful 1 session.

The operating numbers are improving

Q1 FY26 non-GAAP EPS came successful astatine $0.29 against a $0.0127 consensus, gross deed $13.58 billion, up 7.18% twelvemonth implicit year, and non-GAAP gross borderline expanded to 41.0% from 39.2%. The Data Center and AI conception grew 22% twelvemonth implicit year, which matters due to the fact that that is wherever NVIDIA's GPUs request Xeon big CPUs.

Strategic wins support stacking. Intel Xeon 6 was selected arsenic the big CPU for NVIDIA's DGX Rubin NVL8 systems, Google signed a multiyear ASIC and Xeon deal, and Intel 18A is successful high-volume manufacturing successful Arizona. Cantor Fitzgerald raised its terms people to $150, and Jim Cramer said Tan has "successfully turned the institution around."

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The GAAP communicative tells a antithetic communicative

Q1 FY26 posted a $3.73 cardinal nett nonaccomplishment and a $3.14 cardinal operating loss, weighed down by a $4.07 cardinal restructuring complaint tied mostly to Mobileye goodwill impairment. Intel Foundry, the full constituent of the leading-edge bet, keeps burning cash, with caller operating losses moving $2.51 cardinal successful Q4 2025. Free currency travel was antagonistic $3.87 cardinal past quarter.

Valuation present assumes everything works. Forward P/E sits astatine astir 118x, and Trefis flagged a looming "margin squeeze" from rising input costs and softening PC demand. Reddit sentiment connected wallstreetbets has rolled from scores of 77 to 82 successful mid-June to 32 to 50 by precocious June. Composite prediction-market sentiment has fallen 6.37 points implicit the past week.