Intel reported its strongest sales growth in over 15 years, driven by rising demand for its data centre and personal computer components amid expanding artificial intelligence (AI) applications. The company’s revenue for the second quarter reached $16.1 billion, a 25 percent increase compared with the previous year and surpassing analysts’ expectations of $14.4 billion. Following the announcement, Intel’s shares rose 9 percent in after-hours trading, closing previously at $99.78.

Looking ahead, Intel forecast third-quarter revenue between $15.8 billion and $16.8 billion, also exceeding market predictions. Chief Executive Officer Lip-Bu Tan attributed the growth to “unprecedented demand” from AI technologies and expressed confidence that the company is positioned to sustain this expansion.

Significant gains came from Intel’s data centre and AI segment, which saw revenue surge 59 percent year on year to $6.3 billion, outperforming analyst estimates of $5.6 billion. The company also reported gross margins of 40.4 percent, slightly above the 39 percent forecast. Adjusted net income for the quarter rose to $2.2 billion; however, under generally accepted accounting principles (GAAP), Intel posted a net loss of $11 billion.

Intel, historically a dominant player in the semiconductor industry, has faced challenges in recent years due to manufacturing delays, financial strains related to expanding its custom foundry business, and increased competition—particularly from Nvidia, which has led the development of graphic processing units (GPUs) integral to powering large language models and AI workloads.

After a period of decline, Intel has embarked on a strategic turnaround supported in part by initiatives from the previous U.S. administration aimed at revitalizing American semiconductor manufacturing. The company is investing heavily to meet surging demand for AI infrastructure amid intensified global geopolitical competition and efforts by governments to reshore chip production.

Last month, Intel announced plans to release a new AI chip by the end of the year, featuring more cost-effective memory technology and enhanced thermal management. This development comes as other industry rivals also advance their offerings: AMD recently unveiled a suite of data centre products it claims will outperform Nvidia’s, while Nvidia itself is preparing to launch a new “superchip” targeted at personal computing.

These competitive dynamics highlight the accelerating pace of innovation as leading tech companies and chipmakers race to develop faster, smaller, and more energy-efficient semiconductor solutions to meet the growing demands of AI and related technologies.