Intel Q2 Revenue Jumps 25% on AI Demand, Beats Estimates as Strong Q3 Outlook Lifts Shares

Key Takeaways

Intel reported Q2 revenue up 25% year-over-year, nearly 12% above Wall Street estimates, driven by booming AI-related demand. Data center and AI revenue surged 59%, while Intel Foundry revenue rose 31%. The company also issued a stronger-than-expected Q3 revenue forecast, with shares jumping more than 13% in after-hours trading.

Intel delivered a stronger-than-expected second-quarter earnings report on Thursday, as surging demand for AI infrastructure fueled robust growth across its data center and foundry businesses.

The chipmaker reported Q2 revenue of $16.13 billion, well above analysts' expectations of $14.43 billion. Revenue increased 25% from a year earlier, marking Intel's fastest quarterly sales growth in nearly 15 years.

Following the results, Intel shares surged as much as 13% in after-hours trading, reversing losses recorded during the regular session.

AI Business Drives Strong Revenue Growth

Intel's Data Center and AI (DCAI) segment generated $6.3 billion in revenue, up 59% year-over-year, highlighting continued investment in AI infrastructure by enterprise and cloud customers.

The Client Computing Group (CCG) posted $8.9 billion in revenue, representing 13% annual growth, while Intel Foundry reported $5.8 billion, up 31% from a year earlier.

Chief Financial Officer Dave Zinsner said stronger-than-expected demand, improved manufacturing yields, shorter production cycles, and higher shipment volumes all contributed to the quarterly performance.

Chief Executive Officer Lip-Bu Tan said AI is creating "unprecedented demand" for computing power, reinforcing Intel's confidence in long-term infrastructure spending.

Q3 Forecast Tops Market Expectations

Intel also issued an upbeat outlook for the third quarter, forecasting revenue between $15.8 billion and $16.8 billion, compared with analysts' consensus estimate of approximately $15.06 billion.

At the midpoint of $16.3 billion, Intel's guidance is more than 8% above market expectations and slightly exceeds its second-quarter revenue, suggesting management expects demand to remain resilient through the second half of the year.

The guidance implies annual revenue growth of roughly 15% to 23%, outperforming current Wall Street forecasts across the entire projected range.

Investors Welcome Signs of a Recovery

The results eased concerns that Intel was falling further behind in the AI semiconductor race after months of investor skepticism over its competitive position, manufacturing investments, and foundry expansion strategy.

While the revenue beat and optimistic guidance point to improving business momentum, investors are likely to continue monitoring profitability, cash flow, AI product execution, and the long-term returns from Intel's foundry investments as the company works to strengthen its position in the rapidly evolving semiconductor market.