Intel's shares rose approximately 4% in after-hours trading following a strong second-quarter report, where revenue increased 25% year over year to $16.1 billion, surpassing the consensus estimate of $14.42 billion. Non-GAAP earnings per share turned profitable at 42 cents, compared to a loss of 10 cents a year prior, and also beat the expected 21 cents.
CEO Lip-Bu Tan, who took over in March 2025, has been pivotal in transforming Intel from a loss-making entity to a profitable one, aided by the booming demand for AI infrastructure.
The company’s advanced packaging and foundry businesses are becoming increasingly important, allowing Intel to produce its own AI CPUs and meet customer demand without relying on Taiwan Semiconductor Manufacturing Company (TSMC). Despite not announcing major foundry customers, there are expectations for future partnerships as Intel's manufacturing capabilities strengthen.
The company anticipates capital expenditures exceeding $20 billion in 2026, reflecting strong demand signals, which may raise concerns among tech investors about the returns on such investments. However, these investments are seen as necessary to meet the growing demand for U.S.-made chips.
Intel's data center and AI segment showed remarkable growth, with revenue climbing $2.3 billion year over year, driven by strong demand from hyperscalers. The company is also optimistic about the future, projecting revenue between $15.8 billion and $16.8 billion for the next quarter, with gross margins expected to improve.
Overall, Intel's performance and outlook suggest a positive trajectory, reinforcing a strong buy rating and a price target of $140