Intel q2 earnings beat estimates as AI demand lifts outlook

Intel q2 earnings came in ahead of Wall Street expectations, sending the chipmaker’s shares higher in after-hours trading, according to CNBC. For everyday investors, the report matters because Intel is showing signs that its turnaround under CEO Lip-Bu Tan is translating into revenue growth, better margins and stronger demand tied to artificial intelligence.

Intel reported second-quarter revenue of $16.1 billion, up 25% from a year earlier, CNBC said. That topped the $14.42 billion consensus estimate compiled by LSEG. Non-GAAP earnings per share, an adjusted profit figure that excludes certain accounting items, were 42 cents, compared with a 10-cent loss a year earlier and the 21 cents analysts expected, according to LSEG data cited by CNBC.

The stock rose about 4% after the release to roughly $104 a share, CNBC reported, after trading as high as about $113 in the initial reaction.

What drove Intel's Q2 earnings beat?

CNBC attributed the better quarter to demand for Intel’s x86 central processing units, or CPUs, used in AI workloads, along with progress in advanced packaging and foundry operations. Advanced packaging connects multiple smaller chips so they can work together like one larger system. A foundry is a chip factory business that manufactures semiconductors, either for the company itself or for outside customers.

Intel’s data center and AI segment was the strongest part of the report, according to 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 operators and enterprise customers. CNBC said Intel has also been able to raise CPU prices as supply remains tight for AI-related computing needs.

The client computing and physical AI group also posted gains despite a softer personal computer market, CNBC reported. Intel said AI PC revenue rose 26% from the prior quarter, while edge deployments, meaning computing done close to where data is created, now account for about 10% of that segment’s revenue.

Intel’s foundry business, which mainly produces Intel’s own chips, also improved. CNBC reported that foundry revenue increased 31% from a year earlier and that losses narrowed for a second straight quarter as yields and cycle times improved. Yield refers to the share of chips produced successfully, a key metric because higher yields usually make manufacturing more efficient.

One missing piece was a major outside foundry customer announcement. CNBC noted that several large companies, including Apple, have been rumored as potential Intel partners, but Intel did not disclose any formal deals in the report.

How strong is Intel's outlook?

For the third quarter, Intel guided for revenue between $15.8 billion and $16.8 billion, according to CNBC. The midpoint, $16.3 billion, was above the $15.1 billion consensus estimate. Intel also projected GAAP gross margin of 41.0% and non-GAAP gross margin of 42.0%, both ahead of the 40.5% non-GAAP consensus cited by CNBC.

Intel forecast non-GAAP earnings of 38 cents a share for the third quarter, compared with the 27-cent analyst estimate and 23 cents earned in the third quarter of 2025, CNBC reported.

Capital spending is rising with demand. CNBC said Intel now expects more than $20 billion in 2026 capital expenditures, about $3 billion above its prior expectation, and expects spending to increase significantly in 2027 as it invests across its U.S. manufacturing network.

Tan, who became CEO in March 2025, is central to the investor debate around Intel’s recovery, according to CNBC. The next tests are whether Intel can convert AI demand into durable profit growth, win outside foundry customers and manage the cost of building more chip manufacturing capacity.

This story draws on original reporting from CNBC.