Intel gains 263% in 2026 while Qualcomm leans on auto and buybacks

Intel's 263% rally prices in foundry success not yet visible in GAAP profit, while Qualcomm's 24 P/E offers a grounded alternative.

Intel's Data Center and AI revenue climbed 22% to $5.05 billion in Q1, while Qualcomm's automotive business surged 38% to a record $1.33 billion — two diverging bets on where AI silicon demand grows next.

"The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic," Intel CEO Lip-Bu Tan said on the earnings call.

Intel posted $13.58 billion in revenue, its sixth straight beat, with non-GAAP gross margin expanding to 41%. Qualcomm's $10.6 billion in revenue slipped 3.5% year over year as handset sales fell 13% to $6.02 billion, though the company delivered its fourth consecutive EPS beat.

The strategic split is stark: Intel poured $4.96 billion into capex in Q1 alone, buying back its Ireland fab and expanding Penang, while Qualcomm authorized a $20 billion share repurchase and bought back $2.8 billion last quarter. Intel's forward P/E of 154 reflects a turnaround the market is pricing in ahead of GAAP earnings. Qualcomm's trailing P/E of 24 with a 1.67% yield offers a more conventional entry point.

Intel's stock has surged 263% year to date, adding roughly $64.8 billion in market cap in a single session last week after President Donald Trump said Apple plans to partner with Intel on chip design and manufacturing in the U.S. The company also named Seok-Hee Lee as executive vice president at Intel Foundry to lead advanced packaging, a move CEO Tan called "defining capabilities" for AI and high-performance computing. Intel's 18A-P process node, now in risk production, claims 9% higher performance at iso-power or 18% lower power at iso-performance compared with standard 18A.

Qualcomm's counter-narrative is quieter but data-driven. CEO Cristiano Amon told investors the company is "in a period of profound industry transformation" tied to AI agents. The automotive segment hit a record $1.33 billion, and IoT added 9% growth. Qualcomm's hyperscaler custom silicon is expected to ship later in calendar 2026, and its June 24 Investor Day will be the next catalyst for data center revenue targets. The Chinese handset trough is expected to bottom in Q3 and recover in Q4, a swing factor that could add or subtract billions in revenue.

Where the risk lies

Intel's GAAP net loss of $0.73 per share shows the restructuring cost of its foundry pivot. Mizuho's Vijay Rakesh raised his price target to $135 but held a Neutral rating, noting Intel could capture 10% to 15% of the advanced packaging market long term. At $138.65, shares already trade above that target. The July 23 earnings report will test whether foundry orders and packaging revenue can justify the valuation.

Qualcomm's handset concentration remains the primary vulnerability. Apple's vertical integration — including the rumored Intel partnership — threatens a key customer relationship. But the $20 billion buyback authorization signals management's confidence that diversification into auto and data center will offset any handset erosion.

For investors, the choice comes down to torque versus proof. Intel offers turnaround torque for those willing to tolerate restructuring noise and a 154x forward multiple. Qualcomm offers a proven business with a dividend, a buyback, and a data center entry that has yet to be fully priced in. One more clean quarter from Intel would further validate the thesis, while Qualcomm's June 24 Investor Day could be the catalyst that re-rates the stock.

This article is for informational purposes only and does not constitute investment advice.