Intel shares surged 11% in after-hours trading Thursday after the chipmaker delivered second-quarter results that exceeded analyst expectations and issued optimistic guidance for the current quarter.
The company posted 25% revenue growth, marking its fastest quarterly expansion since the third quarter of 2011. The strong performance comes as Intel benefits from the artificial intelligence infrastructure boom, which is driving robust demand for its server processors.
“AI is driving unprecedented demand for compute,” CEO Lip-Bu Tan said in a statement. “As we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise.”
Stock Performance and Recent Volatility
Intel shares have climbed more than 170% so far in 2026 through Thursday’s close, building on an 84% gain last year. The 2025 rally came after the U.S. government took a 10% stake in the company as part of an initiative to bolster domestic chip manufacturing.
Despite the year-to-date gains, the stock had entered a rough patch more recently, falling 28% in July before Thursday’s earnings announcement reversed some of those losses.
Guidance Tops Expectations
For the third quarter, Intel projected adjusted earnings per share of 38 cents on revenue between $15.8 billion and $16.8 billion. According to LSEG, analysts had been expecting revenue of $15.1 billion and earnings of 27 cents per share.
The company also disclosed it is securing long-term agreements with customers for its server CPUs, with some contracts locking in pricing and others focused on chip volume commitments. Intel has reached 10 such long-term agreements so far.
CFO David Zinsner told CNBC that the company is supply constrained in its data center business, with customers demanding more chips than Intel can currently produce. The strategy of locking in long-term deals has become increasingly common in the semiconductor industry, particularly in memory, as vendors seek to protect current high pricing and market position.
Business Unit Performance
Intel’s client computing group, which produces chips for personal computers and remains the company’s largest division, saw revenue rise 13% to $8.9 billion. However, the company said it expects flat PC sales in the third quarter due to ongoing memory shortages.
The more dramatic growth came from Intel’s data center business, where revenue jumped 59% to $6.3 billion. The strong performance reflects the continued buildout of AI infrastructure across cloud providers and enterprises.
The company’s foundry unit, which manufactures chips for other companies as well as Intel’s own designs, reported $5.8 billion in sales, up 31% year over year.
Manufacturing Push and Margin Recovery
Intel is ramping up capital expenditures and targeting a “meaningful increase” next year as it works to transform into a major contract manufacturer for other chip designers. Zinsner told CNBC that the company’s latest manufacturing process, called 14A, is ahead of where older technologies were at comparable stages.
Earlier this week, Intel announced Fortinet as its first named customer under Tan’s leadership, though the security chip project uses an older manufacturing technology. The company has yet to reveal a major customer for its most advanced manufacturing processes, something investors and potential clients continue to await.
Intel’s gross margin recovered to 42%, up sharply from 2.5% in the year-ago period. The company attributed the improvement to economies of scale from higher revenue, as well as a shift toward selling chips with higher margins and better pricing power.
Source: www.cnbc.com — https://www.cnbc.com/2026/07/23/intel-intc-earnings-report-q2-2026.html
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