"Will Intel Corporation's data center business be able to support valuation repair as it wields the 'layoff' blade again on the eve of the second quarter report?"

The semiconductor giant Intel Corporation (INTC.US) is scheduled to announce its second-quarter financial report after the close of trading on July 23. Analysts unanimously expect Intel Corporation to have earnings per share of $0.22 and revenue of $14.45 billion. On the eve of the financial report release, a new round of layoffs in the Data Center and AI Department (DCAI) of Intel Corporation has sparked discussions. Wedbush Securities stated that the latest round of layoffs by Intel Corporation (this time in the Data Center Department) indicates that CEO Liwu Chen is still restructuring the company's organization. Analyst Matt Bryson wrote in a report to clients, "Intel Corporation states that its product commitments and roadmap remain unchanged, describing this as a move to streamline the Data Center and AI Division (DCAI). This is also part of their overall restructuring plan - over the past four years, this plan has reduced their total number of employees by about 40%, from approximately 132,000 in 2022 to about 81,000," "We believe this news continues to demonstrate that Liwu Chen has not completed the restructuring of Intel Corporation's architecture (although there have been some signs of improvement in execution and the underlying demand situation is improving)." It is currently unclear how many employees will be affected. Intel Corporation pointed out that the layoffs will not change the product commitments or company roadmap; instead, they hope these changes will improve efficiency. The Data Center and AI (DCAI) Department of Intel Corporation mainly focuses on server CPUs, custom AI chips, and data center architecture. In the first quarter of 2026, the revenue of this department increased by 22% year-on-year to $5.05 billion. An Intel Corporation spokesperson stated, "As part of our larger strategy to build a more focused, more efficient company, our Data Center Department is adjusting its organizational structure to ensure it has the right positions and skills for the long-term success of the business," "We are committed to respecting all affected employees and providing resources to support them through this transition." AI Wave and Data Center (DCAI) Demand Recovery Analysts point out that the AI industry is gradually evolving from "GPU large-scale training" to "CPU-coordinated real-time inference and Agent architecture." This trend has reactivated strong demand for high computing power server CPUs in the market. According to Wall Street expectations, the Data Center and AI Business (DCAI) in the second quarter will be the main pillar supporting the performance and profit recovery of Intel Corporation. In addition to traditional chip sales, the market is focusing on executives' latest outlook on Intel Corporation's foundry services during the conference call. HSBC recently raised its target price for Intel Corporation to $200, with the core logic being optimistic about the yield improvement of advanced process nodes such as 18A and the potential landing progress of external customers (such as TSMC, Apple Inc., etc.).