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INTC · Forward model · Data Center and AI · Bear case

What has to happen in Data Center and AI

Model as of

This page changes Data Center and 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 $6.75B 45% of company revenue
Explicit segment contribution $30.46B 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.

Data Center and AI

Basis quarter$6.26B
Final quarter$6.75B
Implied CAGR+2%
Final revenue mix45%

The growth engine and the core of the claim under test. DCAI revenue rose 59% year over year to $6,262M in 2026 Q2 on server ASP +48% and server volume +9%, with ASIC revenue inside 'Other DCAI' ($951M) growing faster than the segment. Intel says internal wafer supply, not demand, is the binding constraint and that it persists into 2027, so the model grows the line fast at first and then tapers as capacity arrives and ASPs normalise.

Last four quarters
2025 Q3 $4.12B Reported
2025 Q4 $4.74B Reported
2026 Q1 $5.05B Reported
2026 Q2 $6.26B Reported
Server CPUs (Xeon)Other DCAI: AI accelerators, NICs, IPUs and purpose-built silicon (ASICs)
Sequential growth +3.0%/qtr decaying toward +2.0% +3.0% into 2026 Q3, the largest single contributor to the guided $15.8-16.8B range; supply, not demand, sets it.
Data Center and AI

Latest: $6.75B (2031Q2E)

Period Value
2024Q1 $3.83B
2024Q2 $3.81B
2024Q3 $4.14B
2024Q4 $4.35B
2025Q1 $4.13B
2025Q2 $3.94B
2025Q3 $4.12B
2025Q4 $4.74B
2026Q1 $5.05B
2026Q2 $6.26B
2026Q3E $6.37B
2026Q4E $6.47B
2027Q1E $6.56B
2027Q2E $6.65B
2027Q3E $5.92B
2027Q4E $5.98B
2028Q1E $6.05B
2028Q2E $6.11B
2028Q3E $6.16B
2028Q4E $6.22B
2029Q1E $6.27B
2029Q2E $6.33B
2029Q3E $6.38B
2029Q4E $6.43B
2030Q1E $6.49B
2030Q2E $6.54B
2030Q3E $6.59B
2030Q4E $6.64B
2031Q1E $6.70B
2031Q2E $6.75B

Assumptions & reasoning

  • Intel prints the server line only as a change, not a level: $5,311M of server revenue in 2026 Q2 is derived as segment revenue $6,262M less the disclosed Other DCAI $951M, and is used for context only, not as a driver input.
  • No split into Xeon, Gaudi and ASIC is modelled because none is disclosed; Gaudi is not separately quantified anywhere in the 2026 filings.
  • The 39.5% EBITDA margin is the segment operating margin implied by the disclosed segment table: consolidated operating income $1,796M plus corporate unallocated $1,416M less CCPG $2,343M, Foundry $(2,089)M, All Other $230M and eliminations $254M leaves $2,474M on $6,262M.
  • A significant portion of current and anticipated revenue comes from Intel 7 products made in Israel, which Intel discloses is not insured for war-related business interruption.
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