Long INTC at $87.48 · 12-month target $100 (+14%) · core long with Dec-26 $95 calls for upside. As of the August 25, 2026 close.
- The print. Q2 landed at $16.1B revenue and $0.42 EPS against consensus of $14.4B and $0.22, the seventh straight quarter above guidance, with a 41.8% gross margin. Q3 is guided to $15.8–16.8B at a 42% non-GAAP gross margin.
- The engine. DCAI revenue was $6.3B, up 59% year on year, with $2.47B of operating income at a 39.5% margin.
- The discount. Shares round-tripped from $112 after hours to under $95 after the $23B gross equity offering, and sit 37.9% below the June high. The drawdown came with broad semiconductor de-risking while Q2 fundamentals held.
- The target. The base target is built on FY27E EPS of $2.34, plus a $0.51 credit for 50% of modelled foundry losses. A Korean partnership and memory upside are carried as speculative upside only.
- Risk management. If non-GAAP gross margin falls below 41–42%, we exit the call overlay and reassess. If there is no confirmation of the catalysts by the stop date, we exit or roll. If semiconductor beta breaks down, we hedge or cut gross exposure.