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Intel reported its fastest revenue growth in 15 years as second-quarter revenue rose 25% to $16.1B.
The standout was Intel's Data Center and AI segment, where revenue soared 59% to $6.3B, more than double the pace of overall company growth.
> "AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth." > Lip-Bu Tan, Intel CEO
CEO Lip-Bu Tan, who took over last year, has been repositioning Intel around AI infrastructure. Demand is now outpacing Intel's increasing supply, he said.
A shift in AI's priorities is central to the story. The industry has moved from training large models, dominated by Nvidia GPUs, toward running those models at scale, a process called inference. That workload leans heavily on central processing units, Intel's core product.
Intel Foundry posted $5.8B in revenue, up 31%, as the company pushes to attract outside manufacturing customers. CEO Tan said the company should begin showing progress on external foundry wins by early next year, citing "multiple engagements" without naming clients.
Google has reportedly placed an order for 3M of its custom Tensor Processing Units with Intel Foundry, and Nvidia is said to be exploring Intel as a manufacturing option, according to reports cited by Yahoo Finance.
The foundry push is happening as Taiwan's TSMC struggles to keep pace with surging demand, giving Intel a window to capture overflow manufacturing business.
On capital spending, Intel raised its 2026 budget from $18B to $20B and signaled further increases in 2027, investing in equipment, clean room space, and substrates to meet rising demand across both its chip and foundry businesses.
Gross margin widened to 40.4% on an adjusted basis, up nearly 13 percentage points from a year earlier. That remains well below the 60%-plus margins Intel regularly posted at its peak.
Intel stock had already more than doubled year-to-date before the earnings release, then gained in after-hours trading following the report. For Q3, Intel guided revenue of $15.8B to $16.8B, a range whose low end alone clears the $15.1B Wall Street consensus.
Despite the momentum, a GAAP net loss of $11B in the quarter, driven by accounting treatment of shares held in escrow under Intel's US government investment deal, is a reminder that the turnaround is still a work in progress.
