Shares of Intel climbed 4% in after-hours trading on Thursday after the company posted second-quarter earnings and revenue that exceeded forecasts, signaling powerful momentum from surging demand for AI hardware.
The U.S. tech giant reported adjusted earnings per share of 42 cents on sales of $16.1 billion for the quarter, well ahead of the 21 cents EPS and $14.42 billion revenue anticipated by analysts polled by LSEG. The performance marked the strongest growth in nearly 15 years.
Despite a 28% pullback in July amid broader weakness for chip stocks, Intel shares have risen more than 170% year-to-date after an 84% gain in 2025, reflecting robust investor interest since the U.S. government secured a 10% stake as part of efforts to support domestic chipmaking.
Intel’s profit margin recovered to 42% for the period, a significant improvement compared to just 2.5% a year earlier—an improvement management linked to increased volumes, higher average selling prices, and a sales mix shift toward more profitable products.
Management attributed the pace of growth to heightened demand for processors supporting data center and AI workloads. The company’s data center and AI business generated $6.3 billion in second-quarter revenue, representing a 59% jump over the comparable period. Intel’s client computing group—the PC chip segment—brought in $8.9 billion, up 13% year-over-year. However, sales of PC chips are expected to hold steady into next quarter, with a memory shortage affecting supply.
Looking ahead, Intel projected third-quarter revenue in the range of $15.8 billion to $16.8 billion, beating the average analyst expectation of $15.1 billion. Adjusted earnings per share are guided at 38 cents, compared to the consensus of 27 cents.
The company recently began locking in long-term contracts with data center CPU customers, with some deals guaranteeing volume and, in other cases, fixed pricing. Intel has landed 10 such agreements and is facing supply constraints due to higher-than-expected customer requirements.
Chief Financial Officer David Zinsner noted that customer demand remains strong and durable, prompting Intel to raise its capital expenditure forecast from $18 billion this year to $20 billion, with plans for further increases in 2027.
The company continues to prioritize development of its upcoming 14A manufacturing process, which is intended to anchor its next production wave in 2028. CEO Lip-Bu Tan expressed confidence in the process’s competitiveness, based on increased customer engagement during the most recent quarter.
Leading up to this, investors continue to monitor whether the chipmaker can convert ongoing supply-demand imbalances and AI-fueled momentum into sustained revenue gains and a durable recovery in profitability.
