Gross Margin From 27.5% to 40.4%Thin moat

Intel (INTC) — moat facet

Intel's gross margin rose thirteen points in a year, mostly because chips were scarce, and is still about fifteen points below 2021.

Intel's gross margin shows both how far it fell and how fast it can recover. It was about 55.4% in 20211, 40.0% in 20232, 32.7% in 2024 and 34.8% in 20253. In the second quarter of 2025 it was 27.5%; a year later, 40.4%4.

GAAP gross margin (%)55.4%202140.0%202332.7%202427.5%Q2 202540.4%Q2 202641.0%Q3 2026 guideIntel Forms 10-K, results releases; 2021 and 2023 calculated
Recovering, and still well below 2021.

The recovery has three sources. Prices: server average selling prices rose 48% and client prices 27% in the second quarter of 20265. Cost: management said it cut the cost of its primary Panther Lake product by roughly 50 percent in the year6. And fewer write-downs on old factories and inventory than in 20247.

Only the second is fully under Intel's control. Prices rose because demand exceeded supply8, and they will fall when it does not.

The guidance for the third quarter of 2026 is a GAAP gross margin of 41.0%9, which would be the highest since before 2024.

The costs that pushed margins down were partly one-off. In 2024 Intel recorded $922 million of Gaudi AI accelerator inventory-related charges10 and $3.3 billion of impairments and accelerated depreciation on Intel 7 assets11. Their absence in 2025 and 2026 accounts for some of the recovery, which is another reason the current margin overstates the underlying one.

Margins recovering to the low forties still leave Intel far below where it was. The comparison that matters is with the 2021 level of about 55%12; a margin that stalls near 40% once prices normalise would mean the manufacturing cost gap with TSMC-built rivals remains.

Moat trajectory: Widening

Margin rose to 40.4% in Q2 2026 with 41.0% guided for Q3.

The number that tests this moat
Reported
Gross margin, third-quarter guidance
41.0% GAAP (Q3 2026 guide); 40.4% in Q2 2026

The recovery's next step; a fall back toward 35% as supply loosens would say it was the shortage.

Source: Intel Q2 2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
Still Fifteen Points Below 2021
Even after a year of rising prices, Intel's gross margin is about fifteen points lower than in 2021.
References
  1. Moat Explorer calcIt was about 55.4% in 2021, 40.0% in 2023, 32.7% in 2024 and 34.8% in 2025.
    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 $127.39 = about 55.2 bn; purchase funds 5.7 + 3.2 = 8.9 bn. Warrants 241M x (127.39 - 20.00) = about 25.9 bn. Nvidia stake 215M x 127.39 = about 27.4 bn; 215 / 4,994 = 4.3%. Backers 11.0 + 8.9 + 5.0 + 2.0 = 26.9 bn. Apollo 14.2 - 11.0 = 3.2 bn. Mobileye 100% - 23% = 77%. Net debt end-2025: (2,499 + 44,086) - (14,265 + 23,151) = 46,585 - 37,416 = 9,169; 27 June 2026: (1,988 + 48,549) - (12,874 + 16,853) = 50,537 - 29,727 = 20,810. Shares: diluted 4,530 / 4,090 - 1 = 10.8% (2021-2025); outstanding June 2026 5,043 against 4,090 diluted in 2021 = 23% more. China share of revenue 12,694 / 52,853 = 24.0% (2025); 15,532 / 53,101 = 29.2% (2024); China 12,694 / 22,961 - 1 = -44.7% (2021-2025). Gross margin 43,815 / 79,024 = 55.4% (2021); 21,711 / 54,228 = 40.0% (2023). R&D 16,546 - 13,774 = 2,772; R&D share of revenue 13,774 / 52,853 = 26.1% (2025), 16,546 / 53,101 = 31.2% (2024). Operating cash flow to gross capital spending 9,697 / 17,672 = 0.55. All Other external revenue: 54,228 - 32,305 - 15,980 - 547 = 5,396 (2023); 53,101 - 33,346 - 16,125 - 159 = 3,471 (2024); 52,853 - 32,228 - 16,919 - 307 = 3,399 (2025). Trailing EPS to June 2026: -0.06 - (-0.19 - 0.67) + (-0.73 - 2.16) = -2.09. Market value 669.37 / 86.48 = 7.7 times end-2024; share price 127.39 / 29.23 = 4.4 times the 52-week low - other arithmetic. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Intel's Forms 10-K, 10-Q, results releases, prepared remarks and market data; operands shown in the source line.
  2. Moat Explorer calcIt was about 55.4% in 2021, 40.0% in 2023, 32.7% in 2024 and 34.8% in 2025.
    Moat Explorer calculation from Intel's reported figures ($ 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 - other arithmetic. — 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.
  3. ReportedIt was about 55.4% in 2021, 40.0% in 2023, 32.7% in 2024 and 34.8% in 2025.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  4. ReportedIn the second quarter of 2025 it was 27.5%; a year later, 40.4%.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  5. ReportedPrices: server average selling prices rose 48% and client prices 27% in the second quarter of 2026.
    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 ↗
  6. ReportedCost: management said it cut the cost of its primary Panther Lake product by roughly 50 percent in the year.
    Intel Q2 2026 earnings call prepared remarks (CEO and CFO). — Q2 2026 · publ. 23 July 2026 · source ↗
  7. ReportedAnd fewer write-downs on old factories and inventory than in 2024.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  8. ReportedPrices rose because demand exceeded supply, and they will fall when it does not.
    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 ↗
  9. ReportedThe guidance for the third quarter of 2026 is a GAAP gross margin of 41.0%, which would be the highest since before 2024.
    Intel second-quarter 2026 results release, Form 8-K exhibit 99.1. — Q2 2026 · publ. 23 July 2026 · source ↗
  10. ReportedIn 2024 Intel recorded $922 million of Gaudi AI accelerator inventory-related charges and $3.3 billion of impairments and accelerated depreciation on Intel 7 assets.
    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 ↗
  11. ReportedIn 2024 Intel recorded $922 million of Gaudi AI accelerator inventory-related charges and $3.3 billion of impairments and accelerated depreciation on Intel 7 assets.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 7 MD&A and Note 3: segment revenue, operating income and drivers. — FY2025 · publ. 23 January 2026 · source ↗
  12. Moat Explorer calcThe comparison that matters is with the 2021 level of about 55%; a margin that stalls near 40% once prices normalise would mean the manufacturing cost gap with TSMC-built rivals remains.
    Moat Explorer calculation from Intel's reported figures ($ 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.
Sources
Generated September 25, 2026