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INTC · Forward model · Data Center and AI · Bull 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 $77.13 all other verticals held in this portfolio case
Final-quarter revenue $14.51B 49% of company revenue
Explicit segment contribution $60.86B EBITDA less segment capex, before corporate items

Demand stays ahead of supply for longer than the base case assumes and Intel converts it. Management raised 2026 capital expenditure by roughly $3B and lifted tooling 40% because of demand signals, and says the constraint runs into 2027 - which means the 2026 Q2 ASP level is defended rather than competed away. Guidance of $15.8-16.8B already sits well above the $15.1B the street carried into the print. This case adds growth everywhere and more of it to DCAI and Intel Foundry, so external foundry revenue grows faster than internal wafer transfer and the eliminations ratio falls below the base case's terminal 0.90. Revenue reaches $114.1B across the four quarters to 2031 Q2 against $83.1B in the base case, and the exit multiple goes to 13x - and even then the case values Intel at $77.13, below the $88.24 price.

Data Center and AI

Basis quarter$6.26B
Final quarter$14.51B
Implied CAGR+18%
Final revenue mix49%

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: $14.51B (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 $6.58B
2026Q4E $6.90B
2027Q1E $7.22B
2027Q2E $7.55B
2027Q3E $7.89B
2027Q4E $8.23B
2028Q1E $8.59B
2028Q2E $8.95B
2028Q3E $9.33B
2028Q4E $9.72B
2029Q1E $10.12B
2029Q2E $10.54B
2029Q3E $10.97B
2029Q4E $11.42B
2030Q1E $11.89B
2030Q2E $12.38B
2030Q3E $12.88B
2030Q4E $13.40B
2031Q1E $13.95B
2031Q2E $14.51B

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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