Intel q2 earnings beat estimates as AI demand lifts outlook

Intel q2 earnings topped Wall Street expectations as the chipmaker reported a return to adjusted profitability and issued a stronger-than-expected third-quarter outlook. Revenue rose 25% from a year earlier to $16.1 billion, above the $14.42 billion consensus estimate compiled by LSEG, while shares rose about 4% in after-hours trading to roughly $104, according to CNBC.

Intel reported non-GAAP earnings of 42 cents a share, compared with a 10-cent loss a year earlier and ahead of the 21 cents expected by analysts surveyed by LSEG. CNBC said the stock traded as high as about $113 after the results were released.

The quarter adds to the early record of Chief Executive Lip-Bu Tan, who took over in March 2025. CNBC attributed the improvement to stronger operating discipline and demand tied to artificial intelligence infrastructure, while noting that Intel has not yet announced a major external customer for its foundry business.

What drove Intel's second-quarter earnings beat?

Intel benefited from demand for central processing units used in AI-related computing, according to CNBC. CPUs handle broad computing tasks and are used alongside graphics processing units in AI server racks, with Intel management pointing to a higher CPU-to-GPU ratio as AI workloads evolve.

The data center and AI segment was the strongest contributor cited by CNBC. Revenue in that unit increased by $2.3 billion from a year earlier, while operating income rose by $1.8 billion, helped by demand from hyperscale cloud providers and enterprise customers.

Intel also reported strength in its client computing and physical AI group despite softer conditions in the personal computer market, according to CNBC. The company said AI PC revenue rose 26% from the prior quarter, and edge deployments, which place computing closer to where data is generated, now account for about 10% of the segment’s revenue.

Higher average selling prices also supported sales, CNBC reported, citing demand for higher-end products and some pass-through of cost inflation to end customers.

Foundry and packaging remain central to the strategy

Intel’s foundry business, which primarily manufactures Intel’s own chips and can also make semiconductors designed by other companies, recorded a 31% year-over-year revenue increase, according to CNBC. Losses narrowed for a second consecutive quarter as yields improved and production cycle times shortened.

The foundry model is strategically important for Intel because it gives the company internal manufacturing capacity for its own processors and offers an alternative to Taiwan Semiconductor Manufacturing Company for some customers. Advanced packaging is also becoming more important in AI systems because it links multiple smaller chips so they can operate more like a single larger chip.

Intel’s most advanced process, known as 14A, is expected to enter risk production for internal products in the second half of 2027, CNBC reported. Tan is then expected to decide whether to move that technology into high-volume production in 2028.

Capital spending is set to rise. Intel now expects 2026 capital expenditures to exceed $20 billion, about $3 billion above its prior expectation, CNBC reported. The company also expects a significant increase in 2027 as it invests across its U.S. manufacturing network.

Intel's third-quarter guidance topped consensus

For the third quarter, Intel forecast revenue of $15.8 billion to $16.8 billion. The midpoint of $16.3 billion is above the $15.1 billion consensus estimate cited by CNBC.

The company guided for GAAP gross margin of 41.0% and non-GAAP gross margin of 42.0%, compared with a non-GAAP consensus estimate of 40.5%. Intel also forecast non-GAAP earnings of 38 cents a share, above the 27 cents expected by analysts, according to CNBC. The company earned 23 cents a share in the third quarter of 2025.

This story draws on original reporting from CNBC.