Intel's Data Center Revenue Soared 59% in the Second Quarter. So, Why Did Wall Street Sell the Stock?

Intel shares dropped 8% after the chipmaker reported Q2 2026 results despite posting its fastest revenue growth in 15 years. The company delivered a GAAP net loss of $11.03 billion, driven primarily by a $12.5 billion non-cash charge related to the CHIPS Act.

The underlying business showed strength. Data Center and AI revenue surged 59% year-over-year, while overall revenue climbed 25%. Margins improved across core segments as the company continues its turnaround effort.

The selloff centered on capital expenditure guidance. Intel raised its 2026 capex outlook to $20 billion, a significant increase from original plans. The higher spending reflects the company's foundry ambitions, though that segment remains unprofitable and continues to weigh on consolidated results.

The divergence between operational momentum and bottom-line losses creates a near-term headwind. Data center growth positions Intel to capture share in AI infrastructure buildouts, but the foundry business requires sustained investment before profitability materializes.