Intel shares suffered a dramatic reversal on Friday, erasing nearly $90 billion in market capitalization after the company’s initial post-earnings rally evaporated. The stock had surged as much as 15% in premarket trading after Intel reported second-quarter revenue of $16.1 billion—a 25% year-over-year increase that beat analyst estimates by $1.6 billion. Adjusted earnings per share of $0.42 also crushed the $0.22 consensus, while gross margin came in at 41.8% versus the expected 39%. However, the gains proved short-lived; by the close of regular trading, INTC had fallen 4% on the day, wiping out the entire rally and then some.
The reversal rippled across leveraged single-stock ETFs tied to Intel. The Direxion Daily INTC Bull 2X ETF and GraniteShares 2x Long INTC Daily ETF both dropped more than 20%, highlighting the amplified risks these products carry when the underlying stock reverses swiftly. The sharp turnaround also dragged on broader semiconductor sentiment, with Micron losing 1.8% and Sandisk falling 2.4% despite Intel’s strong top-line numbers.
Underneath the headline figures, Intel’s Data Center and AI revenue surged 59% to $6.3 billion, and Client Computing revenue rose 13% to $8.9 billion. CEO Lip-Bu Tan noted that Q2 server growth was the strongest on record. However, the Foundry unit posted a $2.1 billion operating loss, and a massive $13.6 billion mark-to-market charge tied to escrowed shares under a U.S. government agreement pushed the GAAP net loss to $11 billion. On a non-GAAP basis, net income was $2.2 billion, signaling healthier underlying operations. Intel also raised its 2026 capex outlook to $20 billion and committed to 14A risk production in H2 2027 and high-volume ramp in 2028.
The volatility underscores how sensitive tech stocks remain to AI-driven expectations and execution risks. While Intel’s partnership with Nvidia to expand advanced chip packaging capacity in Arizona added some optimism, the earnings beat was ultimately overshadowed by lingering concerns about foundry profitability and competitive pressures. The episode serves as a cautionary tale for traders using leveraged instruments, especially around high-profile earnings events.
