Intel beat second-quarter estimates and delivered its fastest revenue growth since 2011, sending the stock up 11% in extended trading. Demand from the AI data center buildout drove the quarter, and the company raised its spending plans for the next two years.
Intel beat Wall Street estimates for the second quarter on Thursday and issued guidance above expectations, sending its stock up 11% in extended trading. Revenue climbed 25% to $16.1 billion, the company's fastest growth for any quarter since 2011.
Beyond the top line, adjusted earnings reached 42 cents per share, against the 21 cents analysts expected. CEO Lip-Bu Tan has been leading a turnaround at Intel, which fell behind as Nvidia's chips dominated the first phase of the AI boom.
AI demand drives the data center unit
The revenue surge came from AI infrastructure spending, which is lifting sales of Intel's server processors. Data center revenue rose 59% to $6.3 billion. The client computing group that makes PC chips rose 13% to $8.9 billion.
Chief executive Tan tied the results to AI demand in the statement: "AI is driving unprecedented demand for compute". The company also said it had reached 10 long-term agreements with customers for its server CPUs, some with pricing locked in.
Spending climbs alongside guidance
For the current quarter, Intel guided to revenue between $15.8 billion and $16.8 billion, above the $15.1 billion analysts expected. To meet the demand, it raised its capital expenditure forecast for this year from $18 billion to $20 billion. Zinsner said spending would rise meaningfully next year as well.
Foundry gains as margins recover
Intel's foundry unit reported $5.8 billion in sales, up 31% from a year earlier. It also secured Tesla as a customer for its next-generation 14A process, a win for its push to make chips for other companies.
Meanwhile, gross margin recovered to 42%, up from 2.5% a year ago, which the company attributed to greater scale and higher-margin chips. Intel shares are up more than 170% this year, even after a 28% slide in July.
Sources: CNBC, Investing.com
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