Intel posts fastest growth since 2011 as data center revenue jumps 59% on AI demand
Intel posted its fastest growth since 2011 as data center revenue jumped 59% on AI demand — and shares are up more than 170% in 2026.
In Brief
- Intel reported Q2 revenue up 25 percent year over year to $16.1 billion — its fastest growth for any quarter since 2011 — with guidance well above Wall Street expectations.
- Data center revenue surged 59 percent to $6.3 billion, and CFO David Zinsner said Intel is supply constrained, with customers demanding more than it can produce.
- Intel shares are up over 170 percent in 2026 after the US government took a 10 percent stake last year, and gross margin recovered to 42 percent from 2.5 percent a year ago.
Intel delivered its strongest quarter in nearly a decade and a half, reporting second-quarter revenue up 25 percent year over year to $16.1 billion — the chipmaker’s fastest growth for any period since the third quarter of 2011 — with better-than-expected guidance, according to CNBC. The stock jumped as much as 11 percent in extended trading before paring gains.
“AI is driving unprecedented demand for compute,” CEO Lip-Bu Tan said in a statement quoted by CNBC. “As we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise.” For the current quarter, Intel guided to adjusted earnings of 38 cents per share on revenue between $15.8 billion and $16.8 billion — comfortably above LSEG consensus of 27 cents and $15.1 billion.
The turnaround story has become one of the market’s most dramatic: Intel shares are up over 170 percent so far in 2026 as of Thursday’s close, after soaring 84 percent last year when the U.S. government took a 10 percent stake in the company to support domestic chip manufacturing, per CNBC. Bloomberg reported the results as a forecast that “shatters estimates” on data center strength.
The AI Boom Finally Reaches Intel’s Earnings
The growth engine is the data center. While Intel’s client computing group — still its biggest unit — rose 13 percent to $8.9 billion, data center revenue surged 59 percent to $6.3 billion as the AI infrastructure buildout lifted sales of its server processors, CNBC reported. The foundry business posted $5.8 billion in sales, up 31 percent.
Demand is now outrunning supply. CFO David Zinsner said Intel is supply constrained, with data center customers demanding more than the company can produce. “Customers continue to signal a strong and sustainable spending environment driven by the unprecedented demand for AI compute,” Zinsner said on the earnings call, per CNBC. Intel has begun striking long-term agreements for server CPUs — ten so far — some with locked-in pricing.
Profitability snapped back just as sharply: gross margin recovered to 42 percent from 2.5 percent in the year-ago period, which Intel attributed to scale, richer product mix, and better pricing, per CNBC.
What Intel Still Has to Prove
The missing piece remains the foundry’s marquee customer. Intel primarily manufactures its own chips, and investors keep waiting for a major external name on its advanced nodes; the first named customer under Tan, announced earlier this week, uses an older process for security chips, CNBC noted. Zinsner told CNBC the company’s newest 14A manufacturing process is ahead of where older technologies were at the same point in their cycles.
Intel is also raising capital expenditures, targeting a “meaningful increase” next year as it morphs into a manufacturer for other companies — spending ambitions that, unlike the capex plans punishing other tech giants this week, the market rewarded because demand is visibly outstripping supply.
The result reframes the competitive map. With rivals racing to ship rack-scale AI systems — AMD’s Helios launch and its multi-billion dollar Anthropic partnership among them — Intel’s revival gives the US a second heavyweight in the AI compute supply chain, one now partially owned by its government. Headwinds remain: Intel expects flat PC sales next quarter due to the memory shortage, per CNBC.
FAQ
How fast did Intel grow in Q2 2026?
Revenue rose 25 percent year over year to $16.1 billion, the fastest quarterly growth since Q3 2011, beating estimates of $14.42 billion.
What drove the growth?
The AI infrastructure boom: data center revenue jumped 59 percent to $6.3 billion, foundry sales rose 31 percent, and Intel says demand exceeds its production capacity.
Why are Intel shares up 170 percent in 2026?
A compounding turnaround: the US government’s 10 percent stake, surging AI-driven server demand, recovering margins (42 percent vs 2.5 percent a year ago), and guidance well above Wall Street expectations.
