INTC's Client Computing Business Gains Momentum: Is More Growth Ahead?
Intel Corporation INTC is witnessing strong momentum in the Client Computing and Physical AI Group (CCPG). In the second quarter of 2026, revenues increased to $8.88 billion from $7.87 billion a year ago, up 13% year over year.
Growing adoption of AI PCs is one of the major growth drivers in the near term. The company reported that AI PC revenues surged 26% sequentially in the second quarter. INTC has significantly expanded the reach of its Core Ultra Series 3 portfolio, with more than 400 designs across consumer and commercial systems. Such a broad design pipeline gives Intel greater exposure to different PC categories and price points.
Intel is venturing beyond traditional PCs into edge AI, robotics and Physical AI. Edge deployments represent approximately 10% of CCPG revenues in the second quarter. More than 130 customers are adopting or testing Intel's Series 3 processors for edge AI and robotics applications. The emerging business could diversify CCPG’s revenue base and reduce its exposure to fluctuations in PC demand. Intel expects PC consumption to decline at a low-double-digit percentage rate in 2026 due to high memory prices and other constraints. Against this backdrop, Edge AI, robotics and Physical AI could provide Intel with additional revenue opportunities beyond the traditional PC market.
Enterprise AI adoption is also creating opportunities for Intel beyond processor upgrades. Intel highlighted strong momentum for its vPro manageability and security software. Intel’s integrated Arc graphics solutions have gained market adoption. The company reported more than 40 design wins across creator, workstation, commercial and gaming systems.
Hence, CCPG's growth story is not solely dependent on the PC market. While AI PC adoption is likely to remain a key near-term growth catalyst, Intel is also building new avenues through Edge AI, Physical AI, gaming and graphics.
How Are Competitors Faring?
Intel faces strong competition from Advanced Micro Devices AMD and Qualcomm Incorporated QCOM across the AI PC and edge-computing markets. AMD is witnessing solid momentum in the client computing business. In the second quarter of 2026, AMD reported $3.1 billion in client revenues, up 23% year over year. The growth is backed by strong demand for Ryzen processors.
AMD is also actively expanding the Ryzen AI portfolio across commercial PCs and edge applications, and it is venturing into industrial automation and robotics. This could pose a major threat to Intel’s CCPG expansion initiatives.
Qualcomm is aiming to expand its presence in the AI PC market with its Snapdragon X2 platform. Management said its 2026 Snapdragon X2 PC platforms are in production and positioned to enable always-on agentic experiences, supported by a Hexagon NPU delivering up to 85 TOPS. Qualcomm's Dragonwing platforms also position the company to compete with Intel in the industrial edge AI market.
INTC’s Price Performance, Valuation and Estimates
Intel has skyrocketed 310.7% over the past year compared with the industry’s growth of 34.8%.
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Going by the price-to-book ratio, the company's shares currently trade at 4.73, lower than the industry average of 23.43.
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Earnings estimates for INTC for 2026 and 2027 have increased over the past 60 days.
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Intel stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
