Here's Why Intel Stock Is a Buy Before Earnings

Key Points
Intel is increasing its output of server CPUs.
The company is also raising prices on those products amid skyrocketing demand from artificial intelligence (AI) inference applications.
Intel's buyout of Apollo's stake in its Ireland fab is an extremely bullish indicator.
- 10 stocks we like better than Intel ›
Intel's (NASDAQ: INTC) stock has had a fantastic year, but it is still below its all-time highs. While Intel has been seen as a loser in the artificial intelligence (AI) era and a technology laggard, both perceptions may soon flip to the positive after its upcoming earnings report.
Intel's buyout of Apollo indicates skyrocketing CPU demand
On its fourth-quarter earnings release, Intel gave lackluster first-quarter guidance, sending shares down from their highs. However, management explained that the lower Q1 revenue is due to Intel converting some of its production lines from client CPUs to server CPUs. Since it can take months to produce an advanced chip, Intel had to first finish ongoing client CPU production, then begin production of the new server chips, leading to a months-long supply "hole."
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
However, those server chips should have just begun coming out of Intel's fabs at the end of March. Thus, second-quarter guidance should indicate much stronger revenue and profits than the first quarter, as the new supply is sold.
"Stronger" results could also be an understatement. Based on industry reports, Intel also raised prices on server CPUs by 10% to 15% on two occasions during the first quarter, once in early February and again in late March.
The price increases are due to CPU shortages, driven by huge demand from AI inference applications. Whereas the "training" phase of AI required many GPUs, the "inference" stage of AI deployment is actually heavily dependent on traditional server CPUs.
As a result, demand for CPUs is skyrocketing. On March 20, Intel itself published a short paper noting that the ratio of CPUs to GPUs in inference servers is increasing due to the need for GPU orchestration, data handling, and agents that apply business logic to problems for the GPUs to solve. All these tasks fall to CPUs. Meanwhile, recent compression technologies, such as the just-released TurboQuant algorithm, could enable CPUs to handle all inference work for smaller-model tasks, bypassing GPUs altogether.
A big indicator that the server CPU boom is real was Intel's April 1 announcement that it was buying Apollo Global Management's (NYSE: APO) 49% stake in Intel's Fab 34 in Ireland for $14.2 billion. Fab 34 is where Intel produces its Granite Rapids server CPU, based on the Intel 3 node -- its most advanced server CPU on the market right now.
Apollo initially paid $11.2 billion for its stake in the fab in early 2024, and Intel has also been making payments based on Fab 34's output over this period. So, Intel's buyout of Apollo at a significant premium indicates Intel is very bullish about that fab's output going forward.
Q2 guidance could dazzle
Adding it all up, by the second quarter, Intel will have switched over manufacturing lines from client CPUs to server CPUs, already raised prices on those CPUs twice, and will also benefit from increased profits on those server chip sales that would have otherwise gone to Apollo.
These three factors should add up to a massive profit inflection in Intel's server business, which should be reflected in forward guidance. That makes Intel's stock a buy ahead of the first-quarter release, even after its impressive recent run.
Should you buy stock in Intel right now?
Before you buy stock in Intel, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Intel wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $515,294!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,077,442!*
Now, it’s worth noting Stock Advisor’s total average return is 917% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 2, 2026.
Billy Duberstein and/or his clients have positions in Intel and have the following options: short April 2026 $34 puts on Intel. The Motley Fool has positions in and recommends Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.