Chip Giant Intel Surpasses Wall Street Expectations on AI Boom

Intel has achieved its most significant revenue increase in years, fueled by the booming demand for semiconductors used in artificial intelligence data centers. The chip pioneer's revenue jumped 25% year-over-year to $16.1 billion in the past quarter, marking its fastest growth rate in recent times. This performance surpassed the $14.4 billion analysts had projected.

Intel also exceeded Wall Street's expectations for adjusted earnings per share, reporting 42 US cents, double the average analyst forecast. However, the company recorded an $11 billion net loss. This loss is attributed to an accounting revaluation of shares held in trust, which are to be transferred to the U.S. government in exchange for substantial subsidies.

The company's outlook for the current quarter also significantly exceeded market expectations, leading to a temporary surge of around 12% in its stock price in after-hours trading. Under CEO Lip-Bu Tan, who took over in early 2025, Intel is pursuing cost reductions, including abandoning plans for a factory in Magdeburg. The U.S. government acquired a roughly 10% stake in Intel last August as part of a deal for billions in subsidies.

Once a dominant force in the semiconductor market, Intel has faced challenges for years, particularly with graphics card specialist Nvidia capturing a leading position in AI chips. However, Intel and competitor AMD are now increasingly filling niches within the infrastructure surrounding Nvidia's chip systems. CEO Tan also aims to establish Intel as a contract manufacturer for other chip developers.