Intel Earnings
Big Tech's AI spending spree is spooking investors even as it drives some revenues higher, while Intel faces a sector-wide slowdown ahead of earnings.
IBM just cut its 2026 forecast and reported weaker earnings than expected, posting $2.93 adjusted earnings per share versus $2.97 projected (CNBC Tech). The real damage: mainframe revenue—the company's legacy moneymaker—collapsed 42%, and the company now expects only 4–5% revenue growth instead of over 5%. This matters for Intel because IBM's weakness suggests corporate customers are throttling hardware purchases, which could ripple through the entire chip industry when Intel reports.
Alphabet and Tesla both signaled surging capital spending on artificial intelligence, spooking investors who worry those massive outlays won't pay off soon (CNBC Tech). Alphabet raised its 2026 capex forecast to $195–$205 billion from $180–$190 billion, and warned 2027 will be even higher; Tesla's capex jumped 142% year-over-year to $5.79 billion in Q2 alone. Think of it like buying a new factory: exciting growth potential, but you don't see profits until that factory is humming.
Intel's new foundry business—where it manufactures chips for other companies—just landed its first named customer, security chip maker Fortinet, signaling progress (CNBC Tech). But the broader chip market is slowing as shown by IBM's 42% mainframe collapse, and competitors like TSMC dominate the business Intel is trying to enter. When Intel reports earnings on July 23, the street will be watching whether the company can actually execute this turnaround or if it's another billion-dollar bet that won't pan out.