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Intel results set to highlight turnaround as AI data centers drive demand

Intel is set to report its fourth-quarter earnings amid renewed optimism from investors, who are increasingly confident that the turnaround strategy outlined by Chief Executive Officer Lip-Bu Tan is beginning to take hold. Strong demand from expanding AI-focused data centers is expected to support the company’s traditional server chip business, offering relief after several challenging years.

Intel’s shares have rebounded sharply, rising 84% in 2025, significantly outperforming the broader semiconductor index. The recovery follows a steep decline in 2024, when the company struggled with strategic missteps, delays in its AI roadmap, and job cuts that eroded investor confidence. Recent investments and operational changes have helped reshape sentiment ahead of the earnings announcement scheduled after market close.

Investment Boosts Confidence in Data Center Growth

A series of high-profile investments over the past year has strengthened Intel’s financial position. Capital infusions from Nvidia and SoftBank, along with support from the U.S. government, have provided the company with additional flexibility to revamp its manufacturing and AI strategies. Intel has also streamlined its management structure and reworked its chipmaking operations as part of broader efficiency efforts.

Analysts expect Intel’s data center and server segment to post a significant increase, driven by accelerated buildouts of advanced data centers by major technology firms. These facilities continue to rely on Intel’s central processing units alongside graphics processors from competitors. The data center business is projected to record a more than 30% year-on-year increase in revenue for the December quarter.

Several brokerages have raised their price targets or ratings on Intel in recent weeks, reflecting growing confidence in the company’s near-term outlook and potential pricing power in server processors.

PC Market Challenges and Manufacturing Transition

Despite the improved outlook in data centers, Intel continues to face pressure in the personal computer market. Competition from rival chipmakers and rising memory prices have weighed on PC demand, potentially limiting growth in the segment during 2026. Analysts expect only modest gains in Intel’s PC unit, with global shipments forecast to slow.

Intel is also navigating a critical transition in manufacturing. The company has begun shipping new PC processors built on its advanced 18A manufacturing process, marking a shift away from reliance on external foundries. While early progress is encouraging, production yields remain a concern, impacting profitability.

Adjusted gross margins are expected to decline in the near term due to manufacturing challenges, even as Intel works to improve output consistency. While the turnaround is still unfolding, investors are watching closely for signs that operational improvements and AI-driven demand can deliver sustained recovery.