Intel is growing again, and fast. The chipmaker reported second-quarter revenue of $16.1 billion, up 25% on a year earlier, which chief executive Lip-Bu Tan called its "strongest revenue growth in more than fifteen years". The driver was clear. "AI is driving unprecedented demand for compute," Tan said.
Where the growth came from
Intel's data-centre and AI business, its fastest-growing segment, led the charge, with revenue surging 59% to more than $6 billion. Its PC-chip arm rose 13% to nearly $9 billion, and the foundry unit, which makes chips for other companies, grew about 31%. Profitability swung hard too: gross margin, the slice of revenue left after production costs, recovered to 42% from under 3% a year earlier. On the measure Intel prefers, adjusted earnings came in at $0.42 a share, though a one-off charge left it with a headline loss of $2.16. Finance chief Dave Zinsner said the company had beaten its own guidance on robust demand and improved execution, including volume upside from higher factory yields and improved cycle times. Intel guided third-quarter revenue to between $15.8 billion and $16.8 billion, with adjusted earnings of about $0.38 a share.
The catch
Behind the numbers, Intel is racing to prove its manufacturing comeback is real. It said it had signed ten long-term foundry customers and was actually supply-constrained in data centres, a problem it has not had in years. It pushed ahead on its most advanced chips too: its 18A-P process entered early "risk" production on schedule, meeting a timeline shared with customers a year ago, and its Panther Lake processors moved into high-volume production using ASML's cutting-edge lithography machines. One unusual backdrop: the US government now owns roughly 10% of Intel, after buying nearly $9 billion of shares through a 2025 Chips Act deal, part of the turnaround Tan has led since taking over in March 2025.
Intel has now beaten expectations for seven quarters running, a streak that began under Tan's turnaround plan. Yet its shares slipped after the report, a sign investors want to see it land a marquee customer for its cutting-edge chips before they fully reward the turnaround with a higher share price.
