⚠ Prices Raised in a Shortage Fall in a GlutHigh threat

Intel (INTC) — threat to the moat

Intel's server prices rose 48% because chips were scarce, and scarce chips do not stay scarce.

The best numbers in Intel's 2026 are prices, and prices in chips are cyclical. Server average selling prices rose 48% in the second quarter against volume up 9%1, and Data Center and AI earned 40 percent of revenue2. In 2023 the same segment earned $945 million on $15,980 million of revenue3.

Server price and volume change (%)+11%ASP 2024-8%Volume 2024-4%ASP 2025+9%Volume 2025+48%ASP Q2 2026Intel Form 10-K FY2025; Q2 2026 10-Q
Prices swing with the industry.

The last time Intel's prices fell, they fell fast. In 2025 server selling prices decreased by 4%4, and in 2024 they had risen 11% while volume fell 8%5. The swings follow supply and demand across the whole industry, not Intel's product alone.

The 2026 shortage has two causes Intel does not control: demand for general-purpose processors alongside AI systems, and shortages of substrates and memory6. When either eases, so will prices.

The segment's own recent history is the warning. Its operating margin was about 5.9% in 20237, in a market with enough supply. Nothing about Intel's server products changed as much between 2023 and 2026 as the balance between supply and demand did.

Intel's guidance is the first place it would show. Gross margin guided at 41.0% for the third quarter8; a guide below 38% in any quarter of 2027 would say the pricing cycle has turned.

References
  1. ReportedServer average selling prices rose 48% in the second quarter against volume up 9%, and Data Center and AI earned 40 percent of revenue.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  2. ReportedServer average selling prices rose 48% in the second quarter against volume up 9%, and Data Center and AI earned 40 percent of revenue.
    Intel Q2 2026 earnings call prepared remarks (CEO and CFO). — Q2 2026 · publ. 23 July 2026 · source ↗
  3. ReportedIn 2023 the same segment earned $945 million on $15,980 million of revenue.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 7 MD&A and Note 3: segment revenue, operating income and drivers. — FY2025 · publ. 23 January 2026 · source ↗
  4. ReportedIn 2025 server selling prices decreased by 4%, and in 2024 they had risen 11% while volume fell 8%.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 7 MD&A and Note 3: segment revenue, operating income and drivers. — FY2025 · publ. 23 January 2026 · source ↗
  5. ReportedIn 2025 server selling prices decreased by 4%, and in 2024 they had risen 11% while volume fell 8%.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 7 MD&A and Note 3: segment revenue, operating income and drivers. — FY2025 · publ. 23 January 2026 · source ↗
  6. ReportedThe 2026 shortage has two causes Intel does not control: demand for general-purpose processors alongside AI systems, and shortages of substrates and memory.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1A risk factors and legal proceedings. — FY2025 · publ. 23 January 2026 · source ↗
  7. Moat Explorer calcIts operating margin was about 5.9% in 2023, in a market with enough supply.
    Moat Explorer calculation from Intel's reported figures ($ millions unless stated). Segment margins 2025: Client Computing 9,317 / 32,228 = 28.9% (2024: 11,594 / 33,346 = 34.8%; Q2 2026: 2,343 / 8,877 = 26.4%); Data Center and AI 945 / 15,980 = 5.9% (2023), 1,414 / 16,125 = 8.8% (2024), 3,422 / 16,919 = 20.2% (2025), 2,474 / 6,262 = 39.5% (Q2 2026); Intel Products 12,739 / 49,147 = 25.9%. Revenue shares 2025: client 32,228 / 52,853 = 61.0%; data center 16,919 / 52,853 = 32.0%; together 49,147 / 52,853 = 93.0%. Client growth Q2 2026: 8,877 / 7,871 - 1 = 12.8%. Foundry: internal revenue 17,826 - 307 = 17,519, 17,519 / 17,826 = 98.3%; external share 307 / 17,826 = 1.7%; operating losses 7,083 + 13,291 + 10,318 = 30,692. Intel share of x86 server revenue Q1 2026: 100 - 46.2 = 53.8%. Revenue 2025 against 2021: 52,853 / 79,024 - 1 = -33.1%. Headcount 82.3 / 124.8 - 1 = -34%. Government stake 433.3M x $127.39 = about 55.2 bn; purchase funds 5.7 + 3.2 = 8.9 bn. Warrants 241M x (127.39 - 20.00) = about 25.9 bn. Nvidia stake 215M x 127.39 = about 27.4 bn; 215 / 4,994 = 4.3%. Backers 11.0 + 8.9 + 5.0 + 2.0 = 26.9 bn. Apollo 14.2 - 11.0 = 3.2 bn. Mobileye 100% - 23% = 77%. Net debt end-2025: (2,499 + 44,086) - (14,265 + 23,151) = 46,585 - 37,416 = 9,169; 27 June 2026: (1,988 + 48,549) - (12,874 + 16,853) = 50,537 - 29,727 = 20,810. Shares: diluted 4,530 / 4,090 - 1 = 10.8% (2021-2025); outstanding June 2026 5,043 against 4,090 diluted in 2021 = 23% more. China share of revenue 12,694 / 52,853 = 24.0% (2025); 15,532 / 53,101 = 29.2% (2024); China 12,694 / 22,961 - 1 = -44.7% (2021-2025). Gross margin 43,815 / 79,024 = 55.4% (2021); 21,711 / 54,228 = 40.0% (2023). R&D 16,546 - 13,774 = 2,772; R&D share of revenue 13,774 / 52,853 = 26.1% (2025), 16,546 / 53,101 = 31.2% (2024). Operating cash flow to gross capital spending 9,697 / 17,672 = 0.55. All Other external revenue: 54,228 - 32,305 - 15,980 - 547 = 5,396 (2023); 53,101 - 33,346 - 16,125 - 159 = 3,471 (2024); 52,853 - 32,228 - 16,919 - 307 = 3,399 (2025). Trailing EPS to June 2026: -0.06 - (-0.19 - 0.67) + (-0.73 - 2.16) = -2.09. Market value 669.37 / 86.48 = 7.7 times end-2024; share price 127.39 / 29.23 = 4.4 times the 52-week low - segment margins, revenue mix and market shares. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Intel's Forms 10-K, 10-Q, results releases, prepared remarks and market data; operands shown in the source line.
  8. ReportedGross margin guided at 41.0% for the third quarter; a guide below 38% in any quarter of 2027 would say the pricing cycle has turned.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
Sources
Generated September 25, 2026