Intel's shares surged after it announced a Q3 revenue forecast of up to $16.8 billion, crushing estimates. The strong outlook is fueled by a boom in "agentic AI," which is driving unprecedented demand for the company's data center CPUs. Intel's Q2 revenue grew 25% to $16.1 billion, prompting it to raise its annual capital expenditure to $20 billion. The results signal a successful turnaround, bolstered by foundry wins like Tesla for its next-gen 14A chip process.
Quarterly earnings performance
- ▪Intel's Q2 2026 revenue rose 25.4% to $16.13 billion, with an adjusted profit of 42 cents per share
- ▪Revenue for Intel's data center and AI business was $6.26 billion in Q2 2026, beating estimates of $5.37 billion
- ▪For Q3 2026, Intel forecast revenue between $15.8 billion and $16.8 billion, exceeding the average analyst estimate of $15.1 billion
- ▪Despite revenue growth, Intel reported a net loss of $11 billion in Q2 2026, attributed to restructuring charges and a revaluation of shares
Agentic AI demand surge
- ▪Tech companies are increasing their purchases of central processing units (CPUs) for AI applications, an area where Intel is a primary manufacturer
- ▪A boom in "agentic AI," where autonomous agents perform tasks for users, is driving a resurgence in demand for Intel's data center CPUs
Manufacturing technology roadmap
- ▪Intel had previously warned it might have to abandon its 14A manufacturing process if it could not secure a major customer
- ▪CEO Lip-Bu Tan stated Intel is "fully committed" to high-volume production of chips using its 14A manufacturing technology in 2028
Capital expenditure increase
- ▪Due to booming demand, Intel raised its capital expenditure forecast for the current year to $20 billion from $18 billion
- ▪Intel's CFO David Zinsner stated that capital spending is also expected to be "up meaningfully next year."
Foundry business customer wins
- ▪The foundry business secured Tesla as a customer for its 14A process for the "Terafab" AI chip project
- ▪In April, President Donald Trump announced Apple had agreed to make processors with Intel, but neither company has confirmed the deal
- ▪Intel's contract manufacturing (foundry) business generated $5.77 billion in Q2 sales, surpassing analyst estimates of $5.55 billion
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