Intel posts strongest quarterly revenue growth since 2011, raises outlook

Intel announced second-quarter results that beat analysts' expectations, delivering $16.1 billion in revenue and adjusted earnings of 42 cents per share, compared with consensus estimates of $14.42 billion and 21 cents. The performance marked the company's fastest revenue growth rate for any quarter since 2011, and the stock rose about 4 % in after-hours trading.

The chipmaker attributed the surge to strong demand for its server processors amid the artificial-intelligence infrastructure expansion. Revenue in the data-center segment jumped 59 % to $6.3 billion, while the client-computing unit grew 13 % to $8.9 billion. Intel expects adjusted earnings of 38 cents per share and revenue between $15.8 billion and $16.8 billion for the current quarter, ahead of analysts' forecasts of 27 cents and $15.1 billion.

"AI is driving unprecedented demand for compute," CEO Lip-Bu Tan said in the company statement.

The company said it is negotiating long-term agreements with customers for its server CPUs, with ten such contracts already in place. CFO David Zinsner noted that the firm remains supply-constrained as data-center customers seek more capacity.

"Customers continue to signal a strong and sustainable spending environment," Zinsner said on the earnings call.

Intel also indicated a planned increase in capital expenditures for next year, focusing on factory tooling and its latest 14A manufacturing process, which it said is ahead of previous technology cycles. The foundry business reported $5.8 billion in sales, a 31 % annual increase, though the company has not disclosed a major external customer.

Gross margin improved to 42 % from 2.5 % a year earlier, reflecting higher-margin product mix and scale benefits.