Prediction: Intel Posts a Profitable Year Before 2028. Here's How It Gets There.

4 weeks ago 29

Daniel Sparks, The Motley Fool

Sat, August 1, 2026 astatine 10:29 AM CDT 5 min read

Intel (NASDAQ: INTC) closed astatine $91.13 connected Thursday, up 11.3% successful the spot sector's wide rebound. And by the header numbers, investors conscionable bid up a wealth loser. Over the past 12 months, Intel's nett nonaccomplishment totals astir $11.3 billion.

But the losses are not what they appear. Intel's gross is increasing astatine its fastest gait successful much than 15 years, its gross borderline is expanding 4th by quarter, and the reddish ink traces mostly to accounting charges alternatively than to the concern itself.

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Put the pieces together, and I deliberation 2027 becomes Intel's archetypal profitable twelvemonth of this turnaround. Here's a person look astatine the arithmetic.

Image source: Intel.

Losses made of insubstantial

The 2nd 4th of 2026 shows the pattern. Intel's gross roseate 25% twelvemonth implicit twelvemonth to $16.1 cardinal (above adjacent the apical of management's April forecast), and the institution reported a nett nonaccomplishment of $11.0 cardinal anyway.

Nearly each of that nonaccomplishment came from a azygous enactment item, though. Intel booked a $12.5 cardinal non-cash, mark-to-market complaint tied to shares it holds successful escrow for the U.S. authorities nether its CHIPS Act agreement. It's an accounting adjustment, not currency leaving the business.

The archetypal 4th tells the aforesaid story. Intel reported a $3.7 cardinal nett nonaccomplishment that included a $3.9 cardinal non-cash goodwill impairment and a $1.1 cardinal mark-to-market nonaccomplishment connected escrowed shares.

Set items similar these aside, and the institution has already turned. Non-GAAP (adjusted) nett income was $1.5 cardinal successful the archetypal 4th and $2.2 cardinal successful the second. The 2nd 4th besides produced $7.0 cardinal successful operating currency flow.

The maturation is broad, too. Intel's information halfway and AI (artificial intelligence) conception grew gross 59% twelvemonth implicit twelvemonth past quarter, accelerating from 22% maturation successful the archetypal quarter. Client computing gross roseate 13% twelvemonth implicit year, and the foundry concern grew 31%.

Profitability's gathering blocks are moving successful the close absorption arsenic well. Intel's GAAP gross borderline went from 39.4% successful the archetypal 4th to 40.4% successful the second, and management's third-quarter guidance calls for 41% -- a dependable expansion. Indeed, management's ain forecast already has the bottommost enactment crossing zero, with guidance calling for third-quarter net of $0.31 per stock connected a GAAP basis.