Intel Q2 Revenue Surges 25%, AI Demand Drives Earnings and Guidance Beat

Intel (INTC) reported Q2 2026 earnings after the close on July 23, beating Wall Street estimates on both revenue and earnings and issuing a strong Q3 outlook. AI-driven computing demand continued to fuel core business growth, with the Data Center and AI segment a standout. The stock rose in after-hours trading following the release, but closed at $100.23 on July 23, down 2.33% on the day. With U.S. markets closed for a holiday on July 24, the stock remains at that close with no pre-market or intraday movement.^{[Investor's Business Daily]}

Revenue Hits Strongest Growth in 15 Years, AI Is Core Driver

Intel's Q2 revenue hit $16.1B, up 25% YoY, what CEO Lip-Bu Tan called "the strongest revenue growth in over 15 years."^[intc.com] Non-GAAP EPS was $0.42, while GAAP loss per share was $2.16, largely due to non-cash charges related to the Altera business separation. The company also posted a 40.4% GAAP gross margin and a 17.2% non-GAAP operating margin.^{[TradingView]}

"AI is driving unprecedented demand for compute power, and as we continue to execute, Intel is well-positioned to capture sustainable growth across CPUs, ASICs, advanced packaging, and our vast wafer foundry network," Tan said in the earnings release.^[intc.com]

Data Center and AI Business Surges 59%, Client Business Grows Steadily

By segment, the Data Center and AI (DCAI) unit generated $6.3B in revenue, up a massive 59% YoY, the highlight of the quarter. The growth was driven by strong demand for AI server chips. The Client Computing and Physical AI Group (CCPG) posted $8.9B in revenue, up ~13% YoY, reflecting a PC market recovery and accelerating AI PC adoption.^[intc.com]

Intel Foundry revenue was $5.8B. While net revenue after internal eliminations was lower, the unit made significant process technology progress. The company announced that its Intel 18A-P process has entered risk production and that it has begun volume production of some Core Ultra series processors using ASML's EXE High NA EUV lithography tools.^{[TradingView]}

Q3 Guidance Beats Estimates, Capital Expenditure Plan Raised

Intel's Q3 outlook also topped expectations. The company guided for Q3 revenue between $15.8B and $16.8B, with non-GAAP EPS of $0.38. According to Reuters, this guidance was above the average analyst estimate, driven by sustained AI-powered server chip demand.^[Reuters]

"AI-driven compute demand continues to strengthen, and to support expected growth in our products and foundry business this year and next, we are significantly increasing investment in equipment, cleanroom space, and substrates," said Intel CFO Dave Zinsner.^[intc.com] The company also announced a €500M investment plan to expand Xeon manufacturing capacity and new AI and computing solution partnerships with SambaNova, Foxconn, Siemens, and Hitachi.^{[TradingView]}

Market Reaction and Analyst Views

Intel shares rose in after-hours trading following the report. However, with U.S. markets closed for a holiday on July 24, the stock remains at its July 23 close of $100.23, down 2.33% on the day.^{[Yahoo Finance]}

Investor's Business Daily noted that Intel's revenue and earnings both beat expectations, and the strong Q3 guidance suggests the company is improving its competitive position in the AI wave.^{[Investor's Business Daily]} Reuters reported that Intel's decision to raise its capex plan reflects confidence in long-term AI growth, though it may also keep near-term profit pressure alive.^[Reuters]

Analysts generally believe Intel is gaining share in the AI chip market, particularly in data centers, where its Gaudi AI accelerators and Xeon processor combo are winning more customer orders. However, some note that Intel still needs to prove its foundry business can be profitable to support a higher valuation.^{[Yahoo Finance]}

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