After the stock nearly tripled over the past year, stronger execution and growing CPU demand could fuel further upside.
After the stock nearly tripled over the past year, stronger execution and growing CPU demand could fuel further upside.
Shares of Intel (INTC -3.35%) are up about 180% over the past year, as of Oct. 12, reflecting growing demand for its chips for artificial intelligence (AI) workloads.
The stock is more expensive than it was a year ago, but the prospect of sustainable revenue growth from AI leaves room for further gains over the next several years. "AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise, ASICs, advanced packaging, and vast wafer foundry network," CEO Lip-Bu Tan stated in the 2026 second-quarter earnings report.
Here are three reasons the stock is a buy heading into 2027.
1. Strong execution is producing momentum in financial results
Intel has topped its own financial expectations for seven straight quarters. Beating guidance repeatedly shows the company is executing well against its goals and managing its factories and costs, which can support a higher stock price over time as investors gain confidence. Here are the key highlights from the Q2 earnings report that point to building momentum in the business:
Revenue rose 25% year over year to $16.1 billion -- the company's strongest growth in more than 15 years.
Non-GAAP gross margin (the share of revenue left after production costs) reached 41.8%, more than 12 points higher than a year earlier.
Adjusted earnings per share of $0.42 more than doubled the guidance of $0.20, and reversed a loss of $0.10 in the year-ago quarter.
Higher revenue, better manufacturing yields (more working chips per wafer), and stronger average selling prices drove the strong results, with data-center and AI sales growing 59% to $6.3 billion. AI-related businesses made up roughly 70% of Intel's total revenue in the quarter.
Averytin News Financial update.