Computer processor maker Intel (NASDAQ: INTC) announced better-than-expected revenue in Q1 CY2026, with sales up 7.2% year on year to $13.58 billion. On top of that, next quarter’s revenue guidance ($14.3 billion at the midpoint) was surprisingly good and 9.2% above what analysts were expecting. Its non-GAAP profit of $0.29 per share was significantly above analysts’ consensus estimates.

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Company Overview

Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Intel’s demand was weak over the last five years as its sales fell at a 5.9% annual rate. This was below our standards and suggests it’s a low quality business. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.

Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Intel’s annualized revenue declines of 1.3% over the last two years suggest its demand continued shrinking.

This quarter, Intel reported year-on-year revenue growth of 7.2%, and its $13.58 billion of revenue exceeded Wall Street’s estimates by 9.6%. Adding to the positive news, Intel’s growth inflected positively this quarter, news that will likely give some shareholders hope. Company management is currently guiding for a 11.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 3.4% over the next 12 months. Although this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Product Demand & Outstanding Inventory

Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.

This quarter, Intel’s DIO came in at 137, which is 11 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.

Key Takeaways from Intel’s Q1 Results

It was good to see Intel beat analysts’ EPS expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. Forward guidance also surprised to the upside for next quarter's revenue and EPS. Zooming out, we think this was a very good print. The stock traded up 12.7% to $75.38 immediately after reporting.

Intel put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).