Intel reported 25% revenue growth and beat earnings expectations — its strongest performance in 15 years.
Despite the beat, the stock fell Friday as investors weighed a GAAP loss and a 60x P/E ratio.
Reddit discussion surged, with traders debating whether free cash flow still matters and whether Intel's foundry business can become profitable.
The Earnings That Roared—and Fizzled
Intel's Q2 report on Thursday evening was a blowout by any measure. Revenue hit $16.13 billion, up 25% year over year, beating Wall Street estimates by nearly $1.7 billion. Non-GAAP EPS came in at $0.38-0.42, roughly double the ~$0.21 estimate. The Data Center and AI segment grew 59% year over year. CEO Pat Gelsinger called it "Intel's strongest revenue growth in more than 15 years." The stock initially jumped 12% after hours. But by Friday, it had given back those gains and closed down 4-6% from Thursday's close.
Reddit's Take: Excitement Meets Skepticism
On r/stocks, one user highlighted the paradox: "While the market has been talking about Alphabet and Tesla falling this week on AI capex fears, Intel quietly reported last night and is telling the exact opposite story." With the stock already up 324% over the past year, the post noted that Intel's foundry business remains a challenge, with most revenue internal and ongoing losses, making external orders from companies like Google and Nvidia crucial. Another r/stocks post questioned whether free cash flow still matters for AI capex names: "If the same headline number can tank one stock and barely dent another inside 48 hours, I'm starting to think FCF isn't the tell it used to be." Intel raised its own capex guidance and got rewarded initially.
On r/daytrading, an institutional trader cited Intel's strong earnings as bullish for AI infrastructure, noting that semiconductors remained a focus while MAG 7 stocks sold off. "TSLA contributed to this DD by falling 14% on earnings... this is positive for the AI trade as they are aggressively expanding clusters."
Why the Stock Dropped
The Motley Fool explained that while Intel's pro forma results were stellar, GAAP earnings showed a loss of $2.16 per share. The stock's 60x P/E ratio assumes sustained high growth, and investors reassessed after the initial euphoria. Additionally, Micron also dropped 5.7% on the same day, suggesting a broader sector pullback despite positive news. Intel's raised capex guidance added to concerns about near-term spending.
The Bottom Line
Intel's earnings report confirmed that the AI infrastructure boom is real and Intel is a key beneficiary. But the stock's drop highlights the tension between strong operating performance and rich valuations. Reddit traders are clearly engaged, debating whether the old metrics still apply in the AI era. For Intel, the path forward hinges on turning its foundry business into a profitable external venture — a challenge the company has acknowledged but not yet solved.
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