Intel has projected stronger-than-expected revenue and profit for the third quarter, driven by surging demand for data center processors amid the rapid expansion of AI infrastructure.
The company expects Q3 revenue between $15.8 billion and $16.8 billion, exceeding analysts’ estimate of $15.1 billion. Adjusted earnings are forecast at 38 cents per share, above market expectations of 27 cents. Following the announcement, Intel’s shares rose 5.2% in after-hours trading.
The upbeat outlook reflects growing demand for CPUs used in AI data centers, particularly as the adoption of agentic AI—where autonomous AI agents perform tasks such as software coding—continues to accelerate.
The results strengthen CEO Lip-Bu Tan’s strategy to restore Intel’s technology leadership and compete more effectively with rivals such as Nvidia and AMD in the rapidly growing AI semiconductor market.
During an earnings call, Tan said Intel is now “fully committed” to high-volume production of chips based on its upcoming 14A manufacturing technology in 2028. The company had previously warned that the project could be scaled back if it failed to secure major customers. Tan added, “I’m pleased to see the increasing momentum on customer engagements for Intel 14A, and I’m increasingly confident that the 14A will be a highly competitive process.”
For the 2nd quarter ended June 27, Intel reported revenue of $16.13 billion, up 25.4% year over year, while adjusted earnings reached 42 cents per share, both exceeding analyst expectations. Adjusted gross margin stood at 41.8%, ahead of estimates of 38.8%.
Chief Financial Officer David Zinsner said the strong demand has prompted Intel to increase its 2026 capital expenditure forecast from $18 billion to $20 billion, with spending expected to rise further next year. He also revealed that Intel has signed 3-5 year agreements with customers for data center CPUs and XPUs, although the company will remain disciplined with future investments.
Intel’s Data Center and AI business generated $6.26 billion in Q2 revenue, outperforming estimates of $5.37 billion. Its Client Computing segment reported $8.88 billion in revenue, while the Foundry business posted $5.77 billion, both ahead of analyst expectations.
The foundry division also secured Tesla as a customer for its next-generation 14A manufacturing process for the Terafab AI chip project. Market speculation also continues around a potential manufacturing partnership with Apple, although neither company has confirmed such an agreement.
Industry analysts said the latest results ease investor concerns over Intel’s turnaround strategy and reinforce confidence in its growing position within the AI chip market.
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