Intel AI Demand Fuels Strongest Growth in 15 Years

Chipmaker posts $16.1 billion revenue, up 25%, as data-center and AI sales jump 59%.

Intel just delivered its strongest quarterly revenue growth in more than 15 years, powered by relentless demand for AI compute and data-center processors. The Santa Clara chipmaker reported second-quarter 2026 results after the market close on July 23 that blew past Wall Street estimates and underscored a clear shift: artificial intelligence is no longer a side bet for the company—it is the primary engine.

Revenue climbed to $16.1 billion, a 25% year-over-year increase from $12.9 billion. Non-GAAP earnings per share reached $0.42, roughly double the consensus forecast of about $0.21. On a GAAP basis the company recorded an $11 billion net loss, or $2.16 per share, driven almost entirely by a $12.5 billion mark-to-market charge tied to escrowed shares under a CHIPS Act agreement. Adjusted results painted a different picture of improving execution and operating leverage.

Data Center and AI Take Center Stage

The standout was the Data Center and AI segment, which generated $6.3 billion in revenue—up 59% from a year earlier. That performance far outpaced the overall company and highlighted how hyperscalers and enterprises continue to pour capital into server capacity for large language models and other AI workloads. Intel’s traditional Client Computing and Physical AI Group, which includes PC processors, still contributed the largest absolute dollars at $8.9 billion, up a solid 13%. Foundry revenue rose 31% to $5.8 billion as external customers and internal product groups ramped advanced nodes.

CEO Lip-Bu Tan framed the quarter in straightforward terms: “AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise, ASICs, advanced packaging and vast wafer foundry network. Our Q2 results represent our strongest revenue growth in more than fifteen years, enabled by greater speed, accountability, and customer focus.”

CFO Dave Zinsner pointed to better factory yields, shorter cycle times, and higher average selling prices as the operational drivers behind the beat. Non-GAAP gross margin expanded to 41.8%, well above prior guidance, while cash from operations hit $7 billion.

Supply Still Trails Demand

Management noted that even after exceeding wafer-output expectations, demand continues to outrun available supply. The company signed multiple long-term contracts with server CPU buyers that lock in volume or pricing, a sign of customer confidence in the product roadmap. Intel is accelerating capital spending on equipment, clean-room space, and substrates to support expected growth this year and next.

The foundry business remains a work in progress, yet the 31% revenue increase and progress on Intel 18A—now entering high-volume manufacturing for certain products—suggest the multi-year process-node recovery is gaining traction.

Looking Ahead

For the third quarter, Intel guided revenue between $15.8 billion and $16.8 billion, with non-GAAP EPS of $0.38. Both figures sit comfortably above consensus estimates at the time of the report. The outlook implies continued strength in AI-related products even as the broader PC market remains mixed.

The results arrive at a moment when investors are closely watching which traditional chipmakers can successfully pivot to the AI infrastructure build-out. Intel’s numbers show the company is capturing a larger share of that spend than many expected just a few quarters ago. Execution on manufacturing yields and capacity will determine whether the momentum can be sustained through the rest of 2026 and into 2027.

For now, the message from Santa Clara is clear: the AI wave has arrived at Intel, and it is moving the top line with force.