Intel reported its fastest revenue growth in 15 years, driven by rising demand for chips used in artificial intelligence (AI) data centers, signaling a significant turnaround for the company. For the three months ending in June, the chipmaker posted revenue of $16.1 billion, up 25 percent from a year earlier and exceeding Wall Street forecasts. Intel projected sales for the current quarter between $15.8 billion and $16.8 billion, well above analysts’ estimates.

The growth was largely fueled by Intel’s data center and AI business, which recorded a 59 percent increase in revenue to $6.3 billion, surpassing expectations. This segment includes server chips critical for training and running AI models. Additionally, Intel’s foundry business—its semiconductor manufacturing unit—saw a 31 percent rise to $5.8 billion, while product revenue from Intel-designed chips reached $15.1 billion, well above the estimated $13.6 billion.

Intel’s chief executive, Lip-Bu Tan, highlighted the role of AI in driving unprecedented demand for compute power and emphasized the company’s strengthened position to sustain growth. “The ‘New Intel’ is taking shape,” he said. The company’s turnaround follows years of challenges and significant investment aimed at reclaiming its stature as a top U.S.-based chip maker.

The shift in AI infrastructure spending is benefiting Intel along with competitors such as AMD and Arm. While earlier phases of AI development heavily favored graphics processing units (GPUs) specialized for parallel computations, newer AI applications—often referred to as AI "agents"—rely more on central processing units (CPUs), Intel’s primary product. This has expanded the CPU market significantly, with AMD recently revising its decade-end CPU market estimate from $120 billion to $220 billion.

Intel has also gained strong governmental support, with the U.S. taking a 10 percent ownership stake last year as part of a broader effort to reduce dependence on Asian chip manufacturers like Taiwan Semiconductor Manufacturing Company (TSMC). The company has attracted significant investments from Nvidia and SoftBank and announced plans to collaborate with Elon Musk on a manufacturing project called “Terafab.”

Despite these gains, Intel reported an $11 billion loss under generally accepted accounting principles due largely to volatility in shares held in escrow linked to the U.S. government’s investment. Adjusted net income was $2.2 billion. The company is pursuing a new AI accelerator chip slated for release later this year and aims to attract major clients such as Apple, which recently entered into a manufacturing deal with Intel—signaling increased competition with TSMC in chip fabrication.

Intel also raised its capital spending for 2026 from $18 billion to $20 billion and projected higher investment levels through 2027. The company remains committed to advancing its 14A manufacturing process, intended to enter high-volume production in 2028. CEO Tan acknowledged that the project’s continuation depends on securing enough customers, but expressed confidence in the technology’s prospects.

While Intel’s stock surged following the earnings report, it has faced recent volatility alongside other chipmakers due to concerns over the sustainability of the AI-driven rally. Nonetheless, the renewed demand for CPUs alongside growing AI infrastructure needs has marked a notable shift in the semiconductor industry landscape, offering Intel renewed momentum after a prolonged period of setbacks.