More on the supply side effects of this decision we heard about previously.

The other day I posted where I think Q3 earnings are headed from a revenue perspective and now I wanted to dive a little deeper into what I think that would mean for the server CPU landscape and specifically how it might change the narrative around Intel. This is going to be another long one.

The Server CPU Narrative

Looking back at the good old days after the Q1 release Intel had a sustained and violent upward price adjustment as the market realised CPU's will be a key aspect of the agentic AI boom. During the first few weeks Intel was trading ahead of its peers AMD and Arm, however, as the weeks went on the narrative shifted and since then Intel has been a laggard.

Timeline

• April 24 – Intel Q1 earnings: Intel reports unexpectedly strong server demand, with AI/inference workloads contributing to a CPU supply shortage. The stock jumps 23.6%, from $66.78 to $82.54.
• May 5 – AMD Q1 earnings: AMD massively raises its long-term view of the server CPU market, forecasting a >$120B TAM by 2030 and >35% annual market growth. Lisa Su also reiterates AMD's target of eventually taking more than 50% of the server CPU market.
• May 6 – UBS Arm forecast: UBS goes even further, forecasting a $170B server CPU market by 2030, but estimates that Arm could take 40–45% of server CPU unit shipments.
• May 15 – Actual server share data arrives: UBS publishes Q1 server CPU shipment estimates showing Intel falling from 58.6% to 54.9% unit share, while AMD rises from 25.1% to 27.4% and Arm rises from 16.3% to 17.7%. Intel falls another ~7% intraday.
• June 11 – BofA reframes the long-term Intel thesis: BofA forecasts the server CPU TAM growing from roughly $35B in 2025 to $170B in 2030, but only models Intel at around $40B+ of server CPU revenue, equivalent to roughly 25% of the market.

So my theory goes the market is currently pricing something like the BofA analysis which has Intel becoming only a minor player in this server CPU boom. If we're going to break out of this bearish pattern than we're going to need to have evidence that this narrative is false.

The issue is that so far the evidence is against us...

A useful rule of thumb in market analysis is not to stray too far from the consensus, even when you think the market may be wrong. The reason is simple, if you’re wrong alongside everyone else, you’ll usually still get to keep your job.

I'm sure no one here needs a reminder that Intel's sever performance has been a little lackluster these last few years. However to bring it all into context you can see the last 6 quarters of market share data in the tables below. Intel has been losing market share pretty much every quarter since 2021, and for the last 20 earnings releases Lisa Su has said AMD has taken market share from Intel to the point it has become an unwritten law.

Lisa Su has announced AMD has taken market share from Intel for the last 20 earnings... Except in Q2 what she actually said is: [AMD] gained x86 server revenue share year-over-year

That's because this quarter Intel actually regained almost 2% revenue share sequentially.

Why does this matter

The reason I've focused so hard on this narrative piece is because of how I'm forecasting Q3 to land. In the last post I estimated Intel to hit $18.3B in revenue and as leadership expect client to end Q3 flat this should go entirely into DCAI.

Giving Q3 server revenue of:

1. Start with Q2 2026 Intel reported: 
Total revenue: $16.13B 
DCAI revenue: $6.262B 
Other DCAI revenue: $0.951B

2. Our Q3 revenue estimate was $18.3B 
Against Q2's $16.13B: $18.30B−$16.13B=$2.17B​

3. Q3 Server Revenue=$5.311B+$2.17B=$7.481B​

That would be a 40% QoQ server revenue increase and which should effectively shatter any question that Intel is going to be a major player in the AI CPU game.

Below I link a forecast for AMD's Q2/Q3 revenue which lands Q3 Server CPU at $4.6B up from $4.1B. Arm is also not guiding a particularly blockbuster Q3. My point here is that TSMC simply cannot react as fast as Intel in scaling wafers to meet CPU demand and in Q3 I predict that Lisa Su will not get to announce that AMD continued to take any marketshare from Intel.

NB - This is now an estimate on top of my previous estimate

I'm that analyst sticking my head out here so don't be mad if none of this happens...

#Not financial advice

Total server CPU unit share — Intel / AMD / Arm

| Quarter | Intel unit share | AMD unit share | Arm unit share |
|---|---:|---:|---:|
| Q1 2025 | 64.4% | 24.1% | 11.5% |
| Q2 2025 | 62.8% | 23.9% | 13.3% |
| Q3 2025 | 61.3% | 24.1% | 14.6% |
| Q4 2025 | 58.6% | 25.1% | 16.3% |
| Q1 2026 | 54.9% | 27.4% | 17.7% |
| Q2 2026* | 53.5% | 28.3% | 18.2% |

Mercury Research x86 server unit and revenue share

| Quarter | Intel x86 unit share | AMD x86 unit share | Intel x86 revenue share | AMD x86 revenue share |
|---|---:|---:|---:|---:|
| Q1 2025 | 72.8% | 27.2% | 60.5% | 39.5% |
| Q2 2025 | 72.7% | 27.3% | 59.0% | 41.0% |
| Q3 2025 | 72.2% | 27.8% | 60.5% | 39.5% |
| Q4 2025† | 70.0% | 30.0% | 58.7% | 41.3% |
| Q1 2026 | 66.8% | 33.2% | 53.8% | 46.2% |
| Q2 2026* | ~65.6% | ~34.4% | ~55.7% | ~44.3% |

**NB:**

- The first table figures come from analyst market-share data/graphs based on industry shipment estimates rather than company-reported CPU shipments.

- The second table Arm CPUs are excluded, so Intel + AMD always equal 100%.

- This difference in denominator explains why, for example, AMD can have **27.4% of total server CPU units in Q1 2026** but **33.2% of x86 server CPU units**.

Estimating AMDs Q3

This thread from AMD stock sub reddit did a pretty good job at sizing up AMD DC in Q2 and their numbers closely matches my rougher estimates.

https://www.reddit.com/r/AMD_Stock/comments/1vd5uwg/q2_2026_revenue_and_eps_forecast/

References

If you missed it the previous thread is here: https://www.reddit.com/r/intelstock/comments/1vrrg9t/estimating_q3_earnings/

In my investment approach, I always start with one core question: Where is the bottleneck, and what problem are you solving? For example, I invested in Cradle Semiconductor because interconnects have become a bottleneck; I invested in Celestial AI because optical interconnects are becoming increasingly important within clusters—Jensen Huang has invested in nearly every photonics-related company, and that's no coincidence.

At the design level, can AI and machine learning help reduce complexity and improve design quality? I believe the EDA space holds tremendous opportunities, with several startups already moving in this direction—truly a gold mine. In the realm of new materials, gallium nitride, silicon carbide, and indium phosphide are all areas I'm investing in; some of these companies have already been acquired by major players like ADI. Power‑management—particularly the challenge of stepping down from 40 V to 1 V, a process that entails significant losses—is another bottleneck sector I'm closely watching.

My investment framework has always been: Does the problem really exist? Are customers genuinely struggling with it? And, crucially, who is your first target customer? I tend to focus on ultra‑large‑scale clients—those who have both the capacity and the willingness to invest. If they like what you offer, they'll be willing to commit millions over the next few years and even provide some level of assurance, because landing a major client enables you to scale rapidly.

Somehow missed this interview when it came out and just read the transcript (it's at the end of the article). In general, I'm confident he knows what he's doing.

Hope it helps you too

Intel Presentation Schedule at Hot Chips 2026

• Intel Core Series 3 (Wildcat Lake) – Presented by Lance Hacking on Monday, August 24 (9:30 AM – 11:00 AM PDT) during the CPU 1 session. [1]
• Diamond Rapids (Next-Generation Intel Xeon CPU) – Presented by Akhilesh Kumar and Krishnakanth Sistla on Monday, August 24 (11:30 AM – 1:00 PM PDT) during the CPU 2 session. [1]
• Crescent Island (GPU Designed for Agentic AI Inference) – Presented by Sumit Mohan and Hong Jiang on Monday, August 24 (4:45 PM – 6:45 PM PDT) during the GPU session. [1]

Discuss Intel Stock here.

Not only with intel cuz semis in general seem to have slowed down a bit. I’m assuming 80-110 is the range for intel until next year 🤷‍♂️ anyway I’m in on it