Intel reported second-quarter 2026 revenue of $16.1 billion for the period ended in June, up 25% from a year earlier and the company’s fastest growth rate since the third quarter of 2011. The result came in above the $14.42 billion average analyst estimate compiled by London Stock Exchange Group, or LSEG.
Under generally accepted accounting principles, or GAAP, Intel posted a net loss of $11 billion, equal to a loss of $2.16 per share. The report said the loss was tied to a custodial arrangement involving a 10% stake held by the U.S. government, and did not affect the company’s actual cash flow or reflect the underlying performance of its core business.
On a non-GAAP basis, Intel recorded net income of $2.2 billion, or $0.42 per share, versus a net loss of $400 million, or $0.10 per share, in the same quarter last year. Analysts had expected earnings of $0.21 per share. Since returning to profit in the third quarter of 2025, Intel has now delivered four straight profitable quarters, with earnings expanding over that stretch.
Gross margin also improved. Non-GAAP gross margin reached 41.8%, up from 29.7% a year earlier, an increase of 12.1 percentage points. Chief Financial Officer David Zinsner said the improvement came from the scale benefits of higher revenue and a richer product mix, with the company selling chips carrying better margins and stronger pricing.
Intel shares rose about 11% in after-hours trading following the earnings release.
Data center and AI revenue climbed to $6.3 billion
The quarter’s clearest highlight came from Intel’s data center business. Revenue in the Data Center and AI segment, or DCAI, reached $6.3 billion in the second quarter of 2026, up 59% year over year. That was well above the company’s overall growth rate and ahead of the $5.6 billion analysts had expected.
Chief Executive Officer Lip-Bu Tan said in a statement, “AI is driving unprecedented demand for compute capacity, and as we continue to execute our strategy, Intel is well positioned across CPU, ASIC, advanced packaging and a broad foundry network to capture durable growth opportunities.”
Tan also said demand in the data center market has become intense enough to create a supply squeeze. “In data center, CPU demand is taking off,” he said, adding that demand is running ahead of Intel’s growing supply capacity.
Zinsner said pricing has also improved, saying, “From a pricing standpoint, things are better than we expected.”
In China, some server CPU products have risen by more than 10% from the previous month, and by more than 40% cumulatively since the start of 2026, according to the report. Foreign media outlets cited in the report said both Intel and Advanced Micro Devices, or AMD, are discussing long-term agreements with Chinese server customers that lock in purchase volumes but not prices, with some coverage periods extending beyond two years.
Intel said it has already signed 10 such long-term agreements and acknowledged that customer demand has moved beyond current production capacity, leaving the company supply constrained.
By comparison, the Client Computing and Physical AI Group, or CCPG, which includes the PC business, posted revenue of $8.9 billion, up 13% year over year. Zinsner said PC sales are expected to be flat in the third quarter because of memory shortages.
Foundry revenue rose 31% and brought in its first named customer
Intel’s foundry business, another major strategic pillar for the company, posted second-quarter revenue of $5.8 billion, up 31% from a year earlier. Much of that revenue still came from manufacturing services for Intel’s own products, however, which meant a large amount was offset internally. The earnings report showed the unit remained in an operating loss.
On the closely watched 18A process, Intel kept an upbeat tone. In May, Tan said at JPMorgan’s 54th Annual Global Technology, Media and Communications Conference that Intel 18A had entered mass production for the Core Ultra 3 series processor codenamed Panther Lake, with yields improving at roughly 7% per month, faster than the company had expected internally. Xeon 6+ data center processors have also entered production on the 18A node.
The more advanced Intel 18A-P process has also entered risk production on schedule. Intel has even started using ASML’s high-NA EUV lithography machines to prepare volume production of the transistor “graphic layers” for Panther Lake processors.
On external customer expansion, Intel disclosed a milestone this quarter. Cybersecurity company Fortinet announced a strategic partnership with Intel and said it will use Intel’s design, packaging and manufacturing capabilities to develop Fortinet security processors. According to the report, this is the first publicly disclosed named customer for Intel’s foundry business.
The market has also been watching rumors of a manufacturing partnership between Apple and Intel. Although U.S. President Donald Trump said publicly in June that Apple had agreed to work with Intel to design and manufacture chips in the United States, neither company has confirmed the claim.
Bernstein analysts said that if such a partnership proves real, its initial focus may be on low-volume, low-risk lower-end PC chips, more as a proof of concept than a major business line. In that case, the short-term revenue contribution would likely be limited, though the symbolic value would be significant.
Speaking after the earnings release, Zinsner said Intel has won strong customer interest in advanced chip packaging products and has built up a large backlog in that business. He also said the company’s most advanced 14A process remains on schedule and is expected to enter mass production in 2028.
Intel is also widening its industrial partnership network. The company expanded a long-running strategic partnership with Google Cloud aimed at extending AI capabilities across Intel’s workforce and supporting an internal AI-led transformation. It also signed strategic partnerships with Foxconn, Siemens and Hitachi to jointly develop industry-specific AI and computing solutions powered by Intel processors and dedicated chips.
On the broader CPU market outlook, AMD Chief Executive Officer Lisa Su recently raised her 2030 forecast for the CPU market to $220 billion from $120 billion, citing strong demand from agentic workloads. The report said that view lines up with Intel’s own assessment that demand is outstripping supply.
Still, some investors have started to question valuation after the stock’s run-up. Thomas George, a portfolio manager at Grizzle Investment Management, said Intel is trading at about 74 times forward earnings, far above its 10-year average of 22 times and also above rivals including Nvidia and Broadcom. “This is a stock where the market has already moved ahead of itself, at least in terms of valuation,” he said.
Intel lifts 2026 capital spending plan to $20 billion
To convert customer demand into future growth, Intel said it will step up investment. The company raised its full-year 2026 capital expenditure plan to $20 billion from $18 billion. Zinsner said the earlier, relatively conservative spending plan has changed and Intel is now committing more budget, while expecting spending to increase again in 2027 to support anticipated growth in both products and foundry operations.
As part of that plan, Intel said it will invest about $5.7 billion to expand manufacturing capacity for Xeon 6 and next-generation Xeon processors built on the Intel 3 process. The company also expanded capacity at its Bowers campus in California to increase mask-making capability in support of current and future leading-edge process development and manufacturing.
“We delivered a strong second quarter, driven by healthy demand and improved execution, with revenue above our financial guidance,” Zinsner said in a statement. “AI-driven compute demand continues to strengthen, and to support expected growth this year and next in both products and foundry, we are making significant investments in tools, clean room space and substrates.”
Intel also issued upbeat third-quarter guidance. The company expects revenue of $15.8 billion to $16.8 billion, above the $15.1 billion analyst consensus. It projected non-GAAP earnings of $0.38 per share, ahead of the $0.27 estimate, with gross margin holding at about 42%.