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INTC · Forward model · Client Computing and Physical AI · Bear case

What has to happen in Client Computing and Physical AI

Model as of

This page changes Client Computing and Physical AI inside the complete INTC model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

INTC forward model
Horizon
Consolidated fair value $13.93 all other verticals held in this portfolio case
Final-quarter revenue $7.07B 47% of company revenue
Explicit segment contribution $24.37B EBITDA less segment capex, before corporate items

Scarcity pricing unwinds and the capital programme keeps rising into it. Intel itself says client supply constraints ease over the second half of 2026, and client volume is already falling 8% year over year, so if the 27% ASP gain reverses there is no unit growth underneath it - this case steps client revenue down 8% from 2027 Q1 and server revenue down 12% from 2027 Q3, as price events that leave wafer volume, and therefore Intel Foundry, untouched. Foundry's 2026 Q2 loss improvement was $1.4B of lower period charges against $340M of lower product profit on costlier 18A wafers. Revenue ends 2030 at about $60B, below 2026. The capital programme is held at the base-case schedule in every case, which Intel would not do in this world, so the free cash flow path here is harsher than reality.

Client Computing and Physical AI

Basis quarter$8.88B
Final quarter$7.07B
Implied CAGR−4%
Final revenue mix47%

The PC and edge franchise, and no longer a volume story. In 2026 Q2 client volume fell 8% year over year while client ASP rose 27%, so the segment's $8,877M came from premium mix and demand-based pricing under a supply constraint Intel expects to ease over the second half of 2026. The projection therefore carries almost no sequential growth: volume recovery offsets ASP normalisation rather than adding to it.

Last four quarters
2025 Q3 $8.54B Reported
2025 Q4 $8.19B Reported
2026 Q1 $7.73B Reported
2026 Q2 $8.88B Reported
Client processors (notebook and desktop, reported collectively)Other CCPG: edge, physical AI and robotics silicon
Sequential growth +0.3%/qtr decaying toward +0.6% +0.3% into 2026 Q3: Intel says client supply eases in H2, so returning volume roughly offsets ASP normalisation.
Client Computing and Physical AI

Latest: $7.07B (2031Q2E)

Period Value
2024Q1 $8.27B
2024Q2 $8.14B
2024Q3 $8.16B
2024Q4 $8.77B
2025Q1 $7.63B
2025Q2 $7.87B
2025Q3 $8.54B
2025Q4 $8.19B
2026Q1 $7.73B
2026Q2 $8.88B
2026Q3E $8.80B
2026Q4E $8.72B
2027Q1E $7.96B
2027Q2E $7.89B
2027Q3E $7.83B
2027Q4E $7.77B
2028Q1E $7.71B
2028Q2E $7.66B
2028Q3E $7.60B
2028Q4E $7.55B
2029Q1E $7.50B
2029Q2E $7.44B
2029Q3E $7.39B
2029Q4E $7.35B
2030Q1E $7.30B
2030Q2E $7.25B
2030Q3E $7.20B
2030Q4E $7.16B
2031Q1E $7.11B
2031Q2E $7.07B

Assumptions & reasoning

  • Segment revenue is reported on the post-2025 basis that redistributed the former NEX segment into CCPG and DCAI. Intel recast comparatives only back to 2024 Q1, which is why the history is ten quarters and not twelve.
  • Intel discloses client revenue only as a price/volume percentage decomposition - ASP +27%, volume -8% in 2026 Q2 - and never publishes absolute units or absolute ASPs, so a unit driver here would require inventing the base.
  • The 26.4% EBITDA margin is the disclosed 26% segment operating margin ($2,343M on $8,877M); no depreciation is added to this line because Intel's manufacturing assets sit inside Intel Foundry.
  • Q2 2026 already absorbed $669M of higher period charges taken to align product mix with customer demand, so the basis quarter is not a clean margin peak.
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