Option Sir Breaks Down Hot Topics | A 30% Surge After Earnings! Intel Kicks Off CPU Earnings Season, Is It the Core Beneficiary of AI?

On April 23rd, $Intel (INTC.US)$ the earnings report was released. Revenue for the first fiscal quarter of 2026 increased by 7% year-over-year to $13.6 billion, surpassing the expected $12.4 billion. Earnings per share (EPS) came in at $0.29, significantly beating the market consensus of $0.01. After-hours, Intel surged by 19.95%, driving $Advanced Micro Devices (AMD.US)$ up 7.65% after hours, and $Arm Holdings (ARM.US)$ rose 5.84%.

What’s behind this explosive performance?

1. Multiple business lines showed growth, with revenue increases across all major segments. Data Center and AI (DCAI) (+22%) and Foundry Services (+16%) delivered standout performances. ；

2. Market narrative flipped as demand for CPUs surged due to developments in reasoning models like AI agents. Market research firm TrendForce predicts thatThe CPU-to-GPU ratio in AI data centers will narrow significantly from the current 1:4 to 1:8 to 1:1 to 1:2.This earnings report proves that:CPUs are irreplaceable in the AI inference era, and Intel, with its x86 ecosystem, server CPU market share, and manufacturing capabilities,is deeply benefiting from the AI inference wave, with its growth narrative being redefined. Intel has transformed from a 'laggard' into a 'core beneficiary of AI'.

3. Management provided a positive outlook, with Q2 guidance surpassing expectations.Intel CEO Lip-Bu Tan announced that the company has secured multiple long-term agreements led by Google and established strategic wafer foundry partnerships with Tesla and SpaceX, with capacity in high demand. Chief Financial Officer David Zinsner emphasized during the conference: 'Our AI-driven businesses now account for 60% of total revenue, growing 40% year-over-year,' adding that despite ongoing improvements in factory output, demand continues to outstrip supply. He warned that this gap is in the billions of dollars.The company expects second-quarter revenue to reach between $13.8 billion and $14.8 billion, with a midpoint of approximately $14.3 billion, far exceeding analysts' average forecast of $13 billion.

Risk points: Gross margin pressures due to rising costs of raw materials such as memory and substrates caused by capacity expansion.

How the market views it: Options signal analysis

The options market showsthat yesterday Intel's implied volatility (IV) reached 78.36%, with an IV percentile of 97%. Although IV typically declines post-earnings, tonight’s significant stock price fluctuations may keep IV at elevated levels in the short term.

Options strategy

1. Although the option prices are relatively expensive due to high implied volatility, Intel's post-earnings rally has been quite significant, with positive market sentiment, and the upward trend continued into the overnight session.If you want to further enter the market to capitalize on the upward trend, you can buy a single-leg Call with a small position, using limited potential losses (i.e., the premium paid) to seek profits.Similarly, if you're concerned that the stock price may pull back after a sharp rise, you can also buy a single-leg Put to speculate on volatility.

The design images displayed on the screen are for demonstration purposes only and do not constitute any investment advice or guarantee; market conditions fluctuate frequently, and the illustrated option prices do not represent real-world values.

2. If you hold the underlying stock, you've already gained substantial profits from this recent surge; however, if you're worried about missing out on further gains by selling too early but still want to hold onto the stock, you canestablish a Covered Call position above the current price.If the stock price does not reach the higher Call strike, you can continue collecting the 'rent' from selling the Call options; if the stock price reaches the higher Call strike and the option is exercised, you can take profits at the strike price and exit.

3. If you are optimistic about the long-term upward trend of the stock but have not yet entered via the underlying stock, you canbuy a longer-term LEAPS Call and sell a Call above it to hedge against some time decay, forming a diagonal spread option strategyto pursue leveraged upside potential.

Finally, here's a small perk for fellow investors. Fellow investors are welcome to claim it.Beginner's Options Package

*This promotion is available exclusively to HK invited users; click to learn more.Event Details Rules >>

Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee regarding any securities, financial products, or tools. The risk of loss in trading options can be significant. In some cases, the losses you incur may exceed the initial margin deposit. Even if you set contingency orders such as “stop-loss” or “limit” orders, these may not necessarily prevent losses. Market conditions may render these orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any deficits in your account. Therefore, before trading, you should research and understand options and carefully consider whether such trading suits your financial situation and investment objectives. If you trade options, you should familiarize yourself with the procedures related to exercising options and the expiration of options, as well as your rights and obligations when exercising options and upon their expiration.

808K Views