Intel has posted its fastest revenue growth in 15 years as AI data centres dragged it out of the swamp.
According to the Financial Times, Intel revenue hit $16.1 billion for the three months to 30 June, up 25 per cent year on year. Chipzilla forecast current-quarter sales of $15.8 billion to $16.8 billion, well ahead of the cocaine nose jobs of Wall Street’s expectations.
The US outfit added $2 billion to its capital spending plans, lifting this year’s budget from $18 billion to $20 billion. It expects spending to stay higher into 2027, because apparently fabs do not build themselves with positive thinking.
The stock rose four per cent in after-hours trading. Chipzilla’s shares had reached all-time highs this spring after bumper earnings, but slipped about 25 per cent in the past month with other chip stocks as investors fretted about the AI rally.
Intel chief executive Lip-Bu Tan said: “AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth.”
The “New Intel” was taking shape, Tan said.
The June quarter was helped by demand and price tweaks for Intel-designed chips. Product revenue reached $15.1 billion, beating estimates of $13.6 billion.
Foundry revenue, tied to Chipzilla’s crucial manufacturing business, came in at $5.8 billion, up 31 per cent from a year earlier. That beat expectations, which is handy when you are trying to convince customers your fabs are not a very expensive science project.
Data centre and AI revenue jumped 59 per cent to $6.3 billion. Analysts had expected $5.6 billion, according to Visible Alpha.
Chipzilla looked wobbly a year ago, but demand for its central processing units has given it some breathing room. Its manufacturing business is being talked up again as potential customers look beyond Taiwan Semiconductor Manufacturing Company.
Intel, AMD and Arm have all pointed to rising demand for CPUs in AI inference infrastructure. CPUs have become more important beside GPUs, which handled much of the first AI infrastructure boom.
The Trump administration has thrown its weight behind Intel as the US candidate to challenge TSMC in advanced processor manufacturing. The US government struck a deal last year to take a 10 per cent stake in the company.
Tan has since secured multibillion-dollar investments from Nvidia and SoftBank. He has announced plans to work with Elon Musk on his Terafab manufacturing project while cutting across the company.
Adjusted net income rose to $2.2 billion. Under generally accepted accounting principles, net income swung to an $11 billion loss due to volatility in shares held in escrow under Chipzilla’s government investment deal.
Chipzilla aims to compete with Nvidia and AMD using its own AI accelerator chip later this year. It is trying to tempt large manufacturing clients such as the Fruity Cargo Cult Apple away from TSMC.
Only last year, Tan warned that Chipzilla might abandon 14A if it could not land customers to justify the monster investment. The node is supposed to be the latest in manufacturing processes and a key foundry calling card.
Trump claimed in June that Apple would start using Intel as a manufacturer, although neither company has confirmed it. That left the claim hanging in the air like a tariff policy drafted on a napkin.
Tan said the company was “fully committed” to high-volume production on 14A in 2028.
