Intel Rides AI Demand to Fastest Revenue Growth in 15 Years
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- Intel reported Q2 revenue of $16.1B (vs. $14.42B LSEG consensus) and adjusted EPS of 42 cents (vs. 21 cents expected), with the 25% revenue growth marking its fastest pace since 2011.
- Intel's stock rose about 4% in extended trading after the report; shares remain up more than 170% YTD as of Thursday's close despite a 28% drop in July alone.
- Data center revenue climbed 59% to $6.3B on surging AI-related server processor demand, while client computing revenue rose 13% to $8.9B; Intel expects flat PC sales in Q3 due to a memory shortage.
- Intel's Q3 guidance calls for adjusted EPS of 38 cents on revenue of $15.8B–$16.8B, topping analyst expectations of 27 cents EPS and $15.1B revenue.
- CFO David Zinsner said Intel is supply-constrained in data center chips and has signed 10 long-term agreements with CPU customers — some with pricing locked in — a defensive tactic mirroring memory vendors trying to preserve pricing if the AI cycle cools.
- Intel's foundry business reported $5.8B in sales (up 31% YoY); Intel is boosting capex with a "meaningful increase" targeted next year and says its 14A manufacturing process is ahead of older technologies at the same cycle point.
- Fortinet became Intel Foundry's first named customer under CEO Lip-Bu Tan — but it uses older manufacturing tech for security chips, and a marquee AI-era foundry customer remains undisclosed; gross margin recovered to 42% from 2.5% a year earlier.
Why it matters: Intel's data center segment jumped 59% on AI server demand, and the company is now so supply-constrained that it's locking in 10 long-term customer agreements with pricing fixed — the same defensive playbook memory vendors use to preserve high pricing if the AI cycle softens. For investors still waiting on a major foundry customer, none materialized this quarter.
