Intel Posts Fastest Quarterly Revenue Growth Since 2011, Driven by AI Server Demand

For the quarter ended June 27, Intel reported revenue of $16.13 billion, a 25.4 % year-over-year increase and the strongest quarterly growth since Q3 2011. Adjusted earnings per share were $0.42, double analyst expectations of $0.21. Adjusted gross margin rose to 41.8 %, ahead of the consensus estimate of 38.8 %. The Data Center and AI (DCAI) segment generated $6.26 billion, up 59 % YoY, while the client-computing segment posted $8.88 billion (up 13 %). Intel’s foundry business recorded $5.77 billion in sales, a 31 % rise.

Reuters

The DCAI jump reflects the “agentic AI” boom, where autonomous software agents drive demand for server-grade CPUs. Intel’s leaders said the market caught the company off guard earlier in the year, with demand outstripping manufacturing capacity. The 59 % increase in DCAI sales supplied the bulk of the earnings beat and underpinned the claim that AI is reshaping compute demand.

The Motley Fool

Intel’s 18A process node achieved 85 % wafer yields, up from 65 % in the prior quarter, positioning the foundry to compete with TSMC’s N2 yields of roughly 90 %. A confirmed external order from a major cloud-service provider marks the first commercial contract of significant size for the 18A node. Additional wins include Tesla’s selection for the next-generation 14A “Terafab” AI chip project and design-partner agreements with Apple and Microsoft (both unconfirmed publicly).

Intel (INTC) Surged 8% Tuesday on Three Catalysts - Earnings Tomorrow

Chief Financial Officer David Zinsner said the heightened demand prompted Intel to raise its 2026 capital-expenditure target from $18 billion to $20 billion and to expect “up-meaningful” spending next year. He added that a share sale is “not out of the question,” though no plan is authorized.

Reuters

Zinsner emphasized that long-term agreements spanning three to five years provide confidence for output planning, while also warning that such contracts can be renegotiated if market conditions shift.

Reuters

Following the earnings release, Intel’s shares rose 11 % in extended trading and 12 % in after-hours. The rally built on a prior 8.4 % jump on July 22 after three announcements: Xeon 6700P memory-speed upgrades, an expanded AI partnership with Google Cloud, and the 18A cloud-service commitment. Despite the recent gains, the stock remains down 28 % in July and more than 25 % from its June 22 record close.

Intel (INTC) Surged 8% Tuesday on Three Catalysts - Earnings Tomorrow

Sources differ on the magnitude of Intel’s GAAP loss. Reuters and TS2 report a GAAP net loss of $11.0 billion (loss per share $2.16), driven largely by a $12.5 billion mark-to-market charge on escrowed shares. Non-GAAP figures show adjusted net income of $2.2 billion, reflecting the strong operating performance of the DCAI segment.

Intel Q2 Net Profit Swings to Profit YoY, Adjusted EPS Doubles Estimates: Revenue Up 25%, After-Hours Shares Rise Over 13%

For the third quarter, Intel forecasts revenue between $15.8 billion and $16.8 billion and adjusted earnings of $0.38 per share, both above analyst expectations of $15.1 billion and $0.27. The company will discuss progress on the 18A node, external foundry revenue expectations, and the potential share sale during its earnings call at 2 p.m. PDT on July 23.

Benzinga