Intel Stock Surges After Q2 Earnings Crush Expectations

Intel Stock Climbs

Intel stock rallied in after-hours trading on Thursday after the semiconductor giant delivered second-quarter results that comfortably beat Wall Street expectations. The company also issued stronger-than-expected guidance for the current quarter. 

Intel shares closed the regular trading session at $100.23, down 2.33% from the previous day's close. However, investor sentiment shifted sharply after the earnings release, sending Intel stock up 4.37% in extended trading to $104.61.

Intel stock price (Source: Google Finance)

The company reported adjusted earnings per share of 42 cents, nearly double the 21 cents analysts expected. Revenue also exceeded forecasts by reaching $16.1 billion compared with the consensus estimate of $14.42 billion.

The results were Intel's strongest quarterly revenue growth since 2011, with total revenue climbing 25% year over year. 

AI Demand Powers Intel's Growth

Artificial intelligence is one of Intel's biggest growth drivers as cloud providers and enterprises expand investments in computing infrastructure.

The company's Data Center and AI business generated $6.3 billion in revenue during the quarter, which was a remarkable 59% increase compared with the same period last year. The surge reflects growing demand for server processors supporting AI workloads.

Intel's Client Computing Group, which produces processors for personal computers and is still the company's largest business, also posted solid growth. Revenue increased 13% year over year to $8.9 billion. While management expects PC demand to stay relatively flat during the third quarter because of memory shortages, strong data center growth more than offset those concerns.

Chief Executive Officer Lip-Bu Tan specifically pointed to artificial intelligence as a key long-term catalyst for the business. ”AI is driving unprecedented demand for compute. As we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise.”

Intel Raises Outlook as Margins Recover

Intel also delivered encouraging guidance for the third quarter, forecasting adjusted earnings per share of approximately 38 cents on revenue between $15.8 billion and $16.8 billion. Analysts expected earnings of 27 cents per share on revenue of $15.1 billion.

Profitability also improved quite a bit during the quarter. Gross margin recovered to 42%, compared with just 2.5% a year ago. Intel attributed the improvement to stronger revenue, a greater mix of higher-margin products and improved pricing.

Meanwhile, the company's foundry business generated $5.8 billion in revenue, up 31% from a year earlier. Intel also announced plans for a meaningful increase in capital expenditure next year as it accelerates investment in its contract semiconductor manufacturing business.

Chief Financial Officer David Zinsner said much of the additional spending will support factory tooling for Intel's next-generation 14A manufacturing process, which management believes is progressing ahead of previous technology generations.

Despite the recent earnings-driven rally, Intel stock experienced a lot of volatility this year. Shares have gained more than 170% since the start of 2026 after climbing 84% in 2025, supported in part by the US government's acquisition of a 10% stake in the company to strengthen domestic semiconductor manufacturing. However, the stock fell approximately 28% during July before Thursday's earnings report.

The latest results suggest Intel's turnaround is gaining momentum. Strong AI-driven demand, expanding data center revenue, improving margins and an optimistic outlook helped reassure investors that the company is making meaningful progress.