Intel bets on AI inference to restore CPUs to center of compute as Q1 revenue beats expectations

Intel expects AI inference to drive demand for its CPUs

Chipzilla hopes agents, robots, and edge devices make CPUs cool again... now it has to build the chips Intel is betting on AI to reverse its fortunes, wagering that inference and agentic workloads will restore the CPU to the center of compute - even as its chip manufacturing struggles persist. Speaking to analysts on its Q1 2026 earnings call, CEO Lip-Bu Tan said AI is pushing the total addressable chip market towards $1 trillion, and he reckons Intel is well placed to capture share. "For the last few years, the story around high-performance computing was almost exclusively about GPU and other accelerators. In recent months, we have seen clear signs that the CPU is reinserting itself as the indispensable foundation of the AI era," Lip-Bu said. AI is moving out of the data center and into the physical world, he added, with inference and learning workloads increasingly running on agents, robots, and edge devices. "I think the inference is going to be a much bigger market and the physical AI is another big market. So I think that's an opportunity for us... This is not just our wishful thinking, it is what we hear from our customers, and it is evident in the demand profile for our products." However, Intel needs to build the products in order to deliver on the promises, and the past several years have seen the chipmaker suffer delays to key chips and the cancellation of others, notably its most recent effort to build a credible GPU to challenge AMD and Nvidia in the AI training stakes. Lip-Bu says Chipzilla is making progress with its Intel 14A process node, one that it hopes will turn Intel's Foundry biz into a commercial success by producing chips for other companies as well as its own products. "We expect to see earlier design commitments emerge beginning in the second half of 2026 and expanding into the first half of 2027," he said, echoing comments by chief financial officer David Zinsner last month. Zinsner reported Q1 revenue of $13.6 billion, beating expectations, with AI-driven business lines accounting for 60 percent of that figure, up 40 percent year-on-year. He pointed to recent wins including Xeon 6 being selected as the host CPU for NVidia's DGX Rubin NVL8 systems as evidence that Intel is resurgent in the AI arena. Lip-Bu also referenced a recent long-term deal with Google for co-development of infrastructure processing units (IPUs) to offload networking and other tasks, saying: "This is a good example of how we win in AI infrastructure build-out. And then stay tuned - at the right time, we will announce other contracts." Zinsner added: "One statistic we look at is the ratio of CPUs to GPUs. And if you look at training solutions, they're generally running at 8 GPUs to 1 CPU. As we look into inference, it's probably getting into the 3 or 4 to 1 kind of level. And as you get into agentic and multi-agent, it's one potentially even flip in the other direction a little bit." Another potential AI win is with Elon Musk and his "Terafab" project, which aims to produce large volumes of AI chips - a terawatt's worth of computing power each year, in fact. Although Musk himself talked about this during Tesla's own earnings call this week, Lip-Bu was more tight-lipped when asked about it by an analyst. "Clearly, Elon and I believe that [the] global supply chain is not keeping pace with the rapid acceleration in the demand. And so we both share the vision that we're going to learn a lot together, exploring the innovative way in the process of the manufacturing," he said. "We'll update you when can." Whether you believe the AI hype or not, the stock market liked what it heard, and Intel's share price rose by as much as 20 per cent in after-hours trading, reaching a five year plus high. ®

Intel Gives Strong Outlook in Sign of Payoff From AI Spending

Intel Corp. gave a strong sales forecast for the current period, signaling that the struggling chipmaker is finally beginning to benefit from the giant build-out of artificial intelligence infrastructure. Revenue will be $13.8 billion to $14.8 billion in the quarter ending in June, the company said Thursday in a statement. Analysts, on average, estimated $13 billion, according to data compiled by Bloomberg. Earnings, excluding some items, will be about 20 cents a share, compared with a Wall Street prediction of 9 cents. The upbeat outlook suggests that Chief Executive Officer Lip-Bu Tan is making progress on a challenging comeback plan. After lining up major investments in Intel last year -- helping to strengthen the company's balance sheet -- Thursday's results suggest he's now delivering on a promise to improve its operations. The earnings report shows that the need for data center chips to power the massive AI expansion is lifting demand for Intel's flagship Xeon server processors. That type of generalist semiconductor -- the central processing unit, or CPU -- is a renewed focus for companies trying to turn their AI software into services that bring in revenue. In an interview, Tan said Intel delivered a "solid result" that was ahead of its projections. He expects the strong demand for processors used in AI systems to expand and said the company is "laser-focused" on increasing output from Intel's factories, which still can't produce enough to fill all its orders. "There is huge demand," Tan said. "We are working very hard with our team to make sure we deliver, that we meet that demand but we are still short because the demand keeps increasing from the customers. Intel shares rose 5% in extended trading. The stock had gained 81% this year before the results were released, closing at $66.78. For now, Intel has also been able to navigate another challenge the PC industry is facing: memory-chip shortages. Red-hot demand for server products has lured memory suppliers into concentrating on the high-speed processors for those machines. That's cut into production of standard products used in phones and personal computers, meaning fewer of those mass-market devices are being built and the prices are going up. In addition to making progress on production, Tan has restored Intel's balance sheet via outside investments -- to the point where the company bought back part of a factory in Ireland that it had been forced to sell to raise cash. That purchase was taken as a sign of future confidence by investors. Adding to the optimism, Tesla Inc. CEO Elon Musk said Wednesday that he will use Intel technology as part of his effort to build an in-house chip manufacturing plant. Tan declined to provide further details on the relationship. In the first quarter, which ended March 28, revenue rose 7% to $13.6 billion. Profit was 29 cents a share, excluding some items. Analysts, on average, had estimated sales of $12.4 billion and earnings of 1 cent, according to data compiled by Bloomberg. Gross margin, the percentage of revenue remaining after deducting the cost of production, was 41% in the quarter on an adjusted basis. When Intel was at the height of its powers, it regularly reported margins north of 60%. It predicted a margin of 39% in the current period. The Santa Clara, California-based company has a long way to go to restore its former chip-industry glory. Its annual revenue of $53 billion last year was roughly $25 billion shy of the company's peak revenue, achieved in 2021. Wall Street projects 3% growth in 2026. The Intel Foundry Services division -- the company's factory unit -- generated revenue of $5.4 billion, up 16%. That unit currently relies almost exclusively on Intel product divisions for orders, though it is seeking outside customers. Its PC chip division had revenue of $7.7 billion, and the data center unit posted sales of $5.1 billion. All of those totals topped Wall Street estimates. Intel has so far failed to field the type of AI accelerator that's made Nvidia Corp. the richest in the chip industry and the most valuable publicly traded company in the world. Nvidia and others now are putting more energy into producing microprocessors that are needed to help orchestrate work done in AI data centers. That type of computing was long the domain of Intel's Xeon lineup, which once had a market share of more than 99%.

Intel set for record high as AI-driven CPU demand powers upbeat forecast

April 24 (Reuters) - Intel (INTC.O), opens new tab shares jumped more than 22% in premarket trade on Friday as the chipmaker's robust revenue outlook signaled strong demand for the hardware needed to run advanced AI models. If gains hold through close, the shares are set to hit a record high for the first time since 2000, surpassing their dotcom-era peak. At around $81 per share, the chipmaker's valuation would rise about $75.3 billion. Intel missed the early AI boom after failing to challenge Nvidia's (NVDA.O), opens new tab GPUs and falling behind Taiwan Semiconductor Manufacturing Company (2330.TW), opens new tab in advanced manufacturing, but demand for powerful central processing units (CPUs) for advanced AI systems is opening a new window. "The growing recognition of the role CPUs are playing ⁠in agentic AI workloads is a big factor," said Bob O'Donnell, president and chief analyst at TECHnalysis Research. "If the foundry business can start contributing in a meaningful way in 2027 -- as expected -- that should really show that company's turnaround is complete." CEO Lip-Bu Tan, brought in after years of missteps left Intel trailing in AI, has pushed asset sales, job cuts and cost controls, while securing backing from the U.S. government and partners such as SoftBank (9984.T), opens new tab and Nvidia to support its manufacturing push. Intel shares have nearly tripled since the Trump administration announced its stake in August. The rally lifted sentiment across broader chip stocks. Rival Advanced Micro Devices (AMD.O), opens new tab rose 7%, while U.S.-listed shares of TSMC gained 3%. Intel forecast second-quarter revenue above Wall Street expectations on Thursday, with at ⁠least 14 brokerages raising their price targets on the stock following the results, according to data compiled by LSEG. Chief Financial Officer David Zinsner said part of the forecast reflected higher chip prices, while warning that execution risks in manufacturing could limit how much demand Intel captures. HSBC analysts said growing demand for Intel's Xeon server CPUs, which power data-center workloads including AI inference, could prove a key ⁠driver of Intel's comeback. FOUNDRY BOOST FROM TESLA DEAL Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions, securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk's planned Terafab AI chip complex. Zinsner declined to disclose financial terms ⁠of the deal, saying details were still being finalised. Ryuta Makino, analyst at Intel investor Gabelli Funds, said confirmation that Tesla plans to use Intel's 14A manufacturing process was a "huge win" for the chipmaker's bid to build a contract manufacturing ⁠business that can eventually rival TSMC. Intel last traded at around 90 times its 12-month forward earnings - its highest on record - much higher than AMD and Nvidia, which were last trading at 37.2 times and 22.1 times their 12-month forward earnings, respectively. Reporting by Rashika Singh and Zaheer Kachwala in Bengaluru; Editing by Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab

Intel shares jump 15% as it predicts revenue surge from AI data centres

Intel shares surged on Thursday after it reported strong quarterly results and better than expected financial forecasts as the US chipmaker said it was benefiting from surging AI demand for its data centre products. It reported revenue of $13.6bn for the quarter to the end of March, up about 7 per cent year-on-year and well above Wall Street expectations of $12.4bn. The stock rose 15 per cent in after-hours trading. Intel said it expected between $13.8bn and $14.8bn in revenue for the current quarter, also beating average analyst estimates of $13bn compiled by Visible Alpha. Chief executive Lip-Bu Tan said Intel had benefited from a wave of AI-driven demand that was "increasing the need for Intel's CPUs and wafer and advanced packaging offerings". Big Tech groups are pouring hundreds of billions of dollars into AI data centres, for which Intel supplies central processing units that work alongside the advanced processor chips designed by the likes of Nvidia and mainly manufactured by rival TSMC. The earnings report comes after a huge increase in Intel's share price, which has risen more than 50 per cent in the past month. Intel stock has gained ground since Donald Trump brokered a deal for the US government to take a 10 per cent stake in the US chipmaking champion last summer, which was followed by investments from Nvidia and SoftBank. Its recent partnership with Elon Musk on his Terafab chipmaking facility and its decision to repurchase its equity stake in a chip factory in Ireland from Apollo have added to investor confidence in its manufacturing turnaround. Intel has pumped billions of dollars into a lossmaking strategy to regain its position as a world-leading semiconductor manufacturer to rival Taiwan's TSMC, a risky bet that cost former CEO Pat Gelsinger his job in 2024. Under pressure from Trump, Tan has continued a slimmed-down version of the chipmaking push. Earlier this week, HSBC analysts upgraded their rating on Intel stock, saying the company appeared poised to benefit from a global rush to buy AI infrastructure which will benefit its server CPU business. Its data centre and AI products brought in $5.1bn in revenue in the first quarter, far surpassing expectations. A company spokesperson said the shift from AI model training to the "inference" computing needed to run the models was causing a proportional increase in the number of CPUs needed to accompany each GPU. Intel reported a net loss of $3.7bn, which it blamed on a $3.8bn writedown of goodwill related to its acquisition of Mobileye in 2017. On an adjusted basis, it reported net income of $1.5bn. Its chip foundry business saw revenue of $5.4bn, above the $4.6bn expected by analysts. However, this still came mostly from Intel manufacturing its own products as it hopes to land external customers in the second half of this year. Musk on Wednesday also expressed confidence in Intel's upcoming 14A manufacturing process for advanced chips, saying he planned to use it in his vast factory to supply SpaceX and Tesla. It would make him the first major customer for 14A.

Intel's Revenues Soar, Aided by A.I. Boom

Intel posted blowout financial results on Thursday, a sign that the long-suffering chip maker is finally reaping substantial benefits from the artificial intelligence boom. Revenue in the first quarter rose 7 percent to $13.6 billion, the Silicon Valley company said, more than $1 billion higher than Wall Street expected. Intel's projection for sales in the current quarter also beat prior estimates by a wide margin. Intel's stock, already up more than 80 percent this year on early signs of a turnaround, jumped more than 20 percent after the announcement to nearly $79 a share. "These results make Intel's turnaround look less like a hope-fueled blip and more like a steadier longer-term trajectory," said Jacob Bourne, an analyst at eMarketer, in remarks issued after the announcement. The company posted a loss of $3.7 million, compared with a loss of $800,000 a year earlier, reflecting heavy investments to ramp up its manufacturing. The rapid rise in Intel's share price has substantially multiplied the value of an investment that the Trump administration made in the company last summer. In August, Lip-Bu Tan, a venture capitalist who became Intel's chief executive last year, negotiated a deal under which the government acquired about 10 percent of Intel's shares for $8.9 billion. That stake is now worth nearly $35 billion. Intel, known for microprocessor chips that handle general-purpose calculations, has largely remained on the sidelines as A.I. has taken off. More specialized chips from a rival, Nvidia, reaped the bulk of heavy-duty spending on new equipment and data centers to power the technology. But Intel's chips are playing a wider role in a class of A.I. workloads known as inferencing, which is beginning to dominate investments. Revenue in Intel's data center group jumped to $5.1 billion, up 22 percent from a year earlier, the company said on Thursday. Revenue for that group previously rose more slowly as the company said it struggled to supply enough chips to meet customer demand. Demand is still exceeding the company's chip supplies, Mr. Tan said during a conference call with analysts. But Intel has made progress in boosting production and expects to do even better, he said. The company is working "to meet customer needs," he said. "That is our top priority." Intel has struggled for years to make chips profitably for others, in what is known as its foundry business, as well as manufacturing products designed by its own engineers. But there are signs that Intel's foundry business is starting to win a few converts, as the market leader, Taiwan Semiconductor Manufacturing Company, struggles to fill a flood of orders for A.I. chips. Elon Musk, Tesla's chief executive, said this week that the electric car manufacturer planned to use Intel's most advanced production process to fill some of its growing need for chips. Revenue for the foundry business rose 16 percent to $5.4 billion, Intel said on Thursday. The company's business selling chips for personal computers, its largest by revenue, grew just 1 percent to $7.7 billion. That business has been hurt by rising prices for memory chips.

Things Are Finally Looking Up for Intel and It Has CPUs to Thank for It

Things had not been looking good for Intel for the past few years. Once the star American chipmaker, Intel fell behind competitors like AMD and Nvidia in the age of AI. But now, the chipmaker says a shift in AI is actually helping their catch-up effort, and it's the rising popularity of agentic AI. In the company's latest earnings call on Thursday, Intel reported a revenue increase of 7.2% and said it expects next quarter's revenue to be above market expectations. Intel does have a lot of other factors to thank for its sunny outlook, like lucrative deals with Elon Musk's Tesla and SpaceX for an incredibly ambitious chip factory project that was recently announced, and an agreement with the Trump administration that saw the United States take a 10% stake in the company. But the chipmaker is attributing much of its success in the past quarter to mounting demand for central processing units (CPUs). General processing units, or GPUs, have become the chips most closely associated with the AI boom, and, for a while, the CPUs that had been powering most of the tech coming out of Silicon Valley for decades prior were relegated to second-class status. Now, experts are claiming that CPUs are going through a renaissance as artificial intelligence enters a new phase, one marked by intense hype for agentic AI systems like Openclaw and Anthropic's Claude Code. The demand for CPUs is strong because the chips are more efficient at "some of the orchestration, control plane," and data management tasks that are more crucial in agentic systems, Intel CEO Lip-Bu Tan said in the company's earnings call. Earlier this week, Morgan Stanley analysts said that they expect the AI bottleneck to shift from GPUs to CPUs, claiming that agentic AI systems will require more focus on coordination than just simple computing power, and CPUs can help act as that control layer. Nvidia executives have been whistling a similar tune for months. "The bottleneck is shifting from compute to context management," Nvidia's senior director of HPC and AI hyperscale infrastructure solutions Dion Harris said in a press briefing at CES in January. Then, at Nvidia's GPU Technology Conference last month, the company's CEO Jensen Huang said that he expects agentic AI to drive $1 trillion in revenue for the company, right before announcing a major push into CPUs. Intel's numbers in the latest quarter are a strong indicator that this new stage of AI hype foretold by tech insiders over the last few months might already be underway. "For the last few years, the story around high-performance computing was almost exclusively about GPUs and other accelerators," Intel CEO Lip Bu-Tan said in the company's earnings call. "In recent months, we have seen clear signs that the CPU is reinserting itself as the indispensable foundation of the AI era. CPU now serves as the orchestration layer and critical control plane for the entire AI stack. This is not just our wishful thinking; it is what we hear from our customers, and it is evident in the demand profile." The ratio of CPUs to GPUs that used to be required in the past years was one-to-eight, Tan said in the earnings call. Now, that ratio has allegedly gone up to one-to-four. So that doesn't mean the importance of GPUs is going away. But it does mean that you should prepare yourself to hear the word CPU an awful lot more.

Intel forecasts second-quarter revenue above estimates, shares jump 15%

April 23 (Reuters) - Intel (INTC.O), opens new tab forecast second-quarter revenue above Wall Street expectations on Thursday, underscoring booming demand for the chipmaker's server chips used in artificial-intelligence data centers. Shares of Intel surged 15% in extended trading, adding $49 billion to its market value and extending its 81% rebound so far this year. The company expects revenue of between $13.8 billion and $14.8 billion, compared with an estimate of $13.07 billion, according to data compiled by LSEG. After years of management blunders left the former icon of chipmaking without a meaningful foothold in the booming artificial-intelligence industry, CEO Lip-Bu Tan put a revival plan in place to shore up Intel's balance sheet through asset sales and ⁠layoffs. Tan also secured large investments and struck deals with the U.S. government, SoftBank (9984.T), opens new tab and Nvidia (NVDA.O), opens new tab, giving Intel much-needed fuel to put into its manufacturing operations and inspire strong investor confidence in the firm's longer-term growth. While Intel missed out on the early years of the AI boom, a new opportunity in the form of advanced central processing units (CPUs) has emerged as cloud providers shift from training models to deploying them. INTEL'S CPU OPPORTUNITY "The CPU (is) having a renaissance here," finance chief Dave Zinsner said in an interview with Reuters. "We're starting to be a meaningful beneficiary of the AI investments that are happening." While graphic processing units (GPUs) are used to process large-scale mathematical operations required to generate content, CPUs are better suited to handle workloads done by autonomous AI agents with reasoning capabilities. Part of the reason for the company's optimistic revenue projection is that Intel has elected to raise prices on its chips in ⁠order to pay for the rising costs associated with producing more of them, Zinsner said in an interview. However, Intel's ability to meet demand still depends on whether the company can continue to manufacture its processors at scale and without bottlenecks and supply issues. Intel on Wednesday landed a win for its manufacturing business, securing Elon Musk's Tesla (TSLA.O), opens new tab as its first major customer for the next-generation 14A process to make chips at its Terafab project, an advanced AI chip complex Musk has ⁠envisioned in Austin, Texas. Zinsner declined to provide financial details about the arrangement with the Terafab project. "I think the details of this partnership are still being worked between Lip-Bu and Elon," Zinsner said. Intel earlier this month expanded its AI CPU partnership with Alphabet's (GOOGL.O), opens new tab Google, and joined Musk's Terafab AI chip complex project with SpaceX and Tesla to ⁠make processors powering robotics and data centers. First-quarter revenue came in at $13.58 billion, beating estimates of $12.42 billion. Revenue in the company's data center and AI segment came in at $5.1 billion, compared with estimates of $4.41 billion. Competition in the CPU space remains high, as rivals Nvidia, Advanced Micro Devices (AMD.O), opens new tab and Arm ⁠also eye the market and roll out products to get ahead. Intel reported a first-quarter loss per share of 73 cents as it incurred more than $4 billion in restructuring charges. On an adjusted basis, the company earned 29 cents per share, beating the estimate of 1 cent. Reporting by Zaheer Kachwala in Bengaluru and Max A. Cherney and Stephen Nellis in San Francisco; Editing by Pooja Desai and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Capital Markets Max A. Cherney Thomson Reuters Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron's magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

Intel's CPU supply is recovering just in time for the agentic AI wave

The timing appears strategic as agentic AI technologies gain momentum, potentially positioning Intel to capitalize on increased market demand. Although the supply of Intel CPUs is improving, demand is still outstripping supply, Intel executives told Wall Street analysts Tuesday afternoon. The company is also planning for PC demand to fall, driven by component shortages that are driving prices higher. In January, Intel reported shortages of both PC and server processors and told investors then that it will be prioritizing silicon for higher-margin server products. That went hand in hand with reports of CPU shortages, period, including server makers. On Tuesday, Intel executives said those shortages remain, but the company is beginning to ramp up its output and will continue to do so throughout the year. "Supply will go up in the second quarter," Intel chief financial officer David Zinsner told Wall Street analysts in its first quarter 2026 conference call. "It is going to go up every quarter now going forward. We were certainly at our lowest point in terms of supply in the first quarter relative to the rest of the year." Intel wouldn't say how much money it had left on the table because of the shortages, but chief executive Lip-Bu Tan said it was significant: "Let us just say it starts with a 'b.'" Intel reported $13.6 billion in revenue against a net loss of $3.7 billion on $5.3 billion of charges. Revenue in Intel's Client Computing Business, which governs its PC CPU shipments, was $7.7 billion, down 6 percent from the fourth quarter but better than the company's expectations. Intel's Core Ultra Series 3 (Panther Lake) was the company's best processor launch in five years, the company said, certainly not hurt by our extremely favorable review of the Panther Lake chip. Intel's future is being buffeted by conflicting forces. On one hand, the company says that near-term demand is strong, especially for Panther Lake and its cousin Wildcat Lake (aka the Intel Core Series 3). Likewise, the AI pendulum is beginning to swing back, away from GPUs and back to CPUs, as control of agentic AI becomes important. "One statistic we look at is the ratio of CPUs to GPUs," Zinsner said. "If you look at training solutions, they are generally running seven to eight GPUs to one CPU. As we look into inference, it is probably three to four to one. As you get into agentic and multi-agent, it is potentially even flipping the other direction a little bit." However, Intel is still affected by rising costs across the board, especially in memory and storage. "Constraints and rising prices around key components like memory, wafers, and substrates are driving higher costs that could impact demand for our product at some point in the year," Zinsner said. "We are prudently planning for PC demand to weaken in the second half of the year and expect the full-year PC unit TAM to be down low double-digit percent, in line with industry peers and experts." Unfortunately, little has changed for PC builders everywhere. But at least Intel understands the problem.

Intel CEO Lip Bu Tan crushed Wall Street targets on his 1-year anniversary: We are embracing our 'paranoid' roots | Fortune

Intel has spent the last few years trying to reinvent itself and prove it's still relevant in an AI-centric world dominated by Nvidia's chips. On Thursday, as Intel crushed Wall Street financial targets, the company had a new message: There's nothing wrong with being a 58-year-old maker of PC and server microprocessors. "We are embracing our roots as data driven, paranoid, and engineering driven," CEO Lip Bu Tan said at the start of the company's Q1 earnings conference call, referencing the famous "only the paranoid survive" philosophy of Andy Grove, the late cofounder of Intel. Shares of Intel surged more than 22% in after hours trading Thursday after the company reported first-quarter results. Instead of the 2% decrease in revenue that analysts were expecting for the first three months of the year, Intel grew revenue 7% year-over-year to $13.6 billion. Revenue in the current quarter will range between $13.8 billion and $14.8 billion, Intel said, well above the $13.06 billion analysts have been expecting. Demand for Intel's central processing units (CPU) chips, which are based on its longstanding x86 architecture, is booming, the company said. In fact, revenue would have been even higher had it been able to produce more of the chips. "A year ago the conversation around Intel was about whether we could survive," Tan said. "Today it's about how quickly we can add manufacturing capacity and scale our supply to meet enormous demand for our products." It was hardly an exaggeration when it comes to the bleak outlook for the company, which he joined as CEO in March 2025, a few months after Pat Gelsinger was ousted from the top job. At the time, many observers, including former board members, wondered whether the company should be broken apart, with its manufacturing facilities sold or spun into a separate business. A few months after Tan started, the U.S. government bought a 10% stake in Intel, helping to shore up the company in a deal the Trump administration said was important for national security and American industry. The resurgence in demand for Intel's CPUs is a somewhat surprising turn of events after several years in which the GPUs, or graphics processing units, made by Nvidia appeared to be the future because of their prowess with AI models. "In recent months we have seen clear signs that the CPU is reasserting itself as the indispensable foundation of the AI era," Tan said on the call. The reason, he explained, is that CPUs are better suited for running AI services, as opposed to creating -- or training -- AI models, where GPUs have the edge. In the early days of the generative AI boom, as companies like OpenAI, Anthropic, and Google were training giant new AI models, GPUs were the clear winner. But as the market evolves, Intel said the pendulum is swinging back to CPUs. Intel finance chief Dave Zinsner said that the ratio of GPUs to CPUs in AI data centers is changing. While there are typically seven or eight GPUs for every one CPU for the job of training AI models, the ratio is only three or four GPUs for every one CPU when it comes to inference, or running AI models. And as agentic AI gains ground, Zinsner said the ratio could hit parity or even flip in Intel's favor. But there are still plenty of challenges. Nvidia recently released its first standalone CPU, adding to existing competition Intel faces from longtime rival AMD, as well as from server chips based on the ARM architecture (including an upcoming chip that ARM is making itself, instead of strictly licensing the chip design to other companies). And the bigger question is whether Intel's resurgence is truly a sign that the company is on the mend, or simply a reflection of the booming AI infrastructure buildout, as data center companies snap up as many chips as they can. Big questions also remain about Intel's so-called foundry business, which manufactures chips for other companies and competes with global giant TSMC -- particularly whether Intel will continue to invest the massive sums required to develop the next generation of chipmaking technology. Tan has previously said Intel would not commit to building factories using the most advanced 14A fabrication process (capable of producing chips with 1.4 nanometer circuits) unless it has committed customers. And he gave no update on that front on Thursday, despite speculation that Elon Musk and Telsa's recently announced partnership with Intel, via Terafab, might be the much-anticipated 14A customer. Asked about Terafab deal, Tan described it as a broad relationship in which the two companies will learn a lot together, but provided few specifics. "Elon and I believe the global supply chain is not keeping pace with the rapid acceleration in the demand," he said. As for 14a customers, Tan was equally tight lipped: "We're making great progress in terms of yield and cycle time. And clearly we're engaging with multiple customers; heavy engaging. My style is underpromise, over delivering. So we have no plans to announce the customer unless a customer wants to announce it."

'This is a fundamentally different company today': Intel reports strong financial results, says its upcoming 14A process is already outpacing early 18A yields

Intel has reported its first-quarter 2026 financial results, and they read as something of a victory lap. It wasn't too long ago the company appeared to be down on its knees, but CEO Lip-Bu Tan, now just over a year into his posting, struck a defiant tone in the opening remarks. "Intel is now a very different company than when I first joined over a year ago," said Tan. "We have taken, and continue to take, deliberate steps to rebuild Intel into a more competitive and more profitable company. "A year ago, the conversation about Intel Corporation was about whether we could survive. Today, it is about how quickly we can add manufacturing capacity and scale our supply to meet enormous demand for our products," the Intel chief continued. "This is a fundamentally different company today, and we still have a lot of work ahead." The company reports first-quarter revenue of $13.6 billion, which CFO David Zisner notes, "would have been meaningfully higher, but demand continues to outpace our growing supply." AI-driven businesses are said to now represent 60% of Intel's revenue, and grew by 40% year-over-year. Data center and AI revenue was reported as $5.1 billion, a seven percent sequential increase and 22% year-over-year. ASIC revenue was reported to have nearly doubled compared to the same quarter in 2025, while client computing group revenue is up by $300 million quarter-over-quarter, representing 33% of total revenue. Zisner notes that the client computing revenue increase was down to "improved product margin, sales of previously reserved inventory, better 18A yields, and lower operating expenses." It's AI server-fuelled boom time in the processor industry, although reports have indicated that some Intel chips are already in short supply, and that the industry is waiting for more 18A offerings to plug the gap. Speaking of 18A, the company reports "better" yields and "great progress" for its previously-struggling chip process, although Intel Foundry's operating loss was reported as $2.4 billion. That's a $72 million improvement over the previous quarter, and something Zisner explains as being "mostly offset by increased operating expenses associated with an intentional step-up in Intel 14A investments." CEO Lip-Bu Tan said that the "maturity, yield, and performance" of Intel's in-development 14A process is already outpacing 18A at a similar point in time, and that the company is continuing to develop process design kits (PDKs) with "multiple customers". One of which is Tesla. CEO Elon Musk recently announced that Intel's 14A process will be used to make AI chips for the company, as part of a partnership with Intel for his Terafab project -- which represents a huge potential boon for Intel. In fact, Musk was given special mention in Lip-Bu Tan's opening remarks: "Elon and I share a strong conviction that global semiconductor supply is not keeping pace with the rapid acceleration in demand," said Tan. "We are excited to explore innovative ways to refactor silicon process technology, looking for unconventional ways to improve manufacturing efficiency that will eventually lead to a dynamic improvement in the economics of semiconductor manufacturing." And there's always that Nvidia/Intel collaboration to consider, too. Rumours have suggested that the team green/team blue efforts will be named "Serpent Lake", and potentially be a combination of Nvidia's next-gen Rubin GPU tech and Intel's own silicon. The exact details are mostly speculation at this point, though, and Nvidia was only tangentially mentioned in the earnings call. Still, Intel's certainly been busy racking up partnership and collaboration agreements in the past year, and by the sounds of it, the AI boom has played a significant part in its impressive performance, too. The company's share price jumped by 20% after the earnings and forecasts were revealed, and that's likely to be news that makes Lip-Bu Tan, and Intel's investors, very happy indeed.

Intel shares soar 20% as AI demand fuels first quarter earnings beat

Intel posted first-quarter results that beat expectations, sparking a 20% rise in its share price in after-hours trading. The US government's stake in the company, acquired under the Trump administration, is up nearly 300%. Investors drove Intel shares up 20% in after-hours trading on Thursday after the company published a quarterly report that signalled a successful pivot towards AI-driven hardware. According to the financial disclosure, Intel surpassed analyst predictions for both revenue and earnings. Revenue came in at $13.58 billion (€11.6bn) against a $12.3 billion (€10.5bn) estimate, a 7.2% rise year-on-year, while adjusted earnings per share clocked $0.29 against a $0.01 estimate that many analysts had anticipated. The firm also provided evidence that its strategy to integrate advanced AI capabilities across its product range is yielding results and strengthening the outlook. The core of Intel's financial recovery was found in its Data Centre and AI (DCAI) division, which delivered results that far outpaced Wall Street estimates. The DCAI segment generated $5.05 billion (€4.2bn) in revenue for the quarter, representing a 22.4% increase compared to the same period last year. This figure was notably higher than the $4.41 billion (€3.77bn) that analysts had projected. The figures confirmed that its Xeon 6 processors and Gaudi 3 AI accelerators have gained significant traction among enterprise customers and cloud service providers. Intel CEO Lip-Bu Tan, who only started a year ago, stated that "the next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic." "This shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings." Looking ahead, Intel has issued a robust forecast for the second quarter, projecting revenue between $13.8 billion (€11.8bn) and $14.8 billion (€12.6bn). This guidance sits well above the $13 billion (€11.1bn) that investors had expected. These positive figures come as a relief to shareholders who witnessed Intel's most turbulent year in recent history. In 2025, the company faced a severe existential crisis, reporting multi-billion dollar losses and struggling with inefficient manufacturing nodes. To prevent a collapse, which was argued could threaten national security, the Trump administration took a direct 9.9% equity stake in the business in August 2025. The US government invested $8.9 billion (€7.8bn) at a $20.47 (€18.01) share price, however, $5.7 billion (€5bn) of the investment was funded with grants that had already been awarded to Intel but not yet paid. As part of the broader deal, Intel scrapped high-profile factory projects in Germany and Poland to consolidate its operations and focus on US domestic production. At the time of writing and following the 20% rise in after-hours trading, Intel shares sit at $81.3 (€71.5) representing a nearly 300% increase since the Trump administration took a stake. During this period of distress, Intel also executed a massive downsizing strategy, cutting its global workforce by 25%, or roughly 25,000 employees. The move was designed to stem the flow of capital and simplify a "needlessly fragmented" factory footprint, according to management. The current earnings beat suggests that these drastic measures, while difficult at the time, have successfully stabilised the balance sheet and allowed the company to reinvest in the high-margin AI market where it had previously lagged behind competitors.

Intel crushes Wall Street's expectations and its stock surges 20% as revival gains pace - SiliconANGLE

Intel crushes Wall Street's expectations and its stock surges 20% as revival gains pace Intel Corp. crushed analyst's expectations as it delivered its first-quarter earnings results today, in a sign that its efforts to turn around its business under Chief Executive Lip-Bu Tan are finally starting to pay off. The chipmaker reported solid earnings before certain costs such as stock compensation of 29 cents per share, way ahead of Wall Street's target of a profit of just a penny a share. Revenue for the period came in at $13.58 billion, also crushing the Street's expectations, with analysts forecasting sales of just $12.42 billion for the quarter. Intel's stock surged more than 20% in late trading on the back of today's results, adding to strong momentum that has transformed it into one of the hottest stocks on the market this year. With today's gains, the stock is now up 81% in the year-to-date, after soaring 84% in 2025. What's interesting about Intel's rising stock is that it hasn't been accompanied by much of a turnaround in its business, which fell far behind rival chipmakers such as Nvidia Corp. and Advanced Micro Devices Inc. at the beginning of the artificial intelligence chip boom. Most of the company's momentum stems from efforts by the Trump administration to champion the chipmaker, with the U.S. government notably becoming its largest shareholder in a deal made last year to secure additional funding and bring more chip manufacturing stateside. Nvidia has also made a sizable investment in Intel, and so has SoftBank Group Corp. However, there are signs that the tide is beginning to turn. Intel's revenue increased by 7% compared to the same period one year earlier, having previously recorded year-over-year declines in five of the past seven quarters. Moreover, Intel is expecting to see its revenue grow again in the short term. For the current quarter, it's forecasting sales of between $13.8 billion and $14.8 billion, well ahead of the analyst consensus of $13.07 billion. It's also forecasting earnings of around 20 cents per share at the midpoint of its guidance range, ahead of the Street's 9-cent-per-share target. Intel's growth is all the more encouraging because, for the most part, it was driven by the company's data center business, where it's finally starting to see traction in AI amid surging demand for its central processing units to power inference workloads. Revenue in that business rose 22% from a year earlier to $5.1 billion. Intel's CPUs have finally started getting attention because so-called "agentic AI," which refers to autonomous workers that perform business tasks on behalf of humans with minimal supervision, have different computing needs. Nvidia's powerful graphics processing units are generally overkill for AI agents, which can run more efficiently on CPUs. On a conference call with analysts, Tan hammered home this point: "The CPU is reinserting itself as the indispensable foundation of the AI era," he said. "This isn't just our wishful thinking, it's what we hear from our customers." There's still plenty of work to be done for Intel, though, as the chipmaker is still unprofitable. Its net loss during the quarter widened to $4.28 billion, rising from a loss of $887 million in the year-ago period. Intel's strategy differs from many other chipmakers because it still operates its own chip foundries, which means it not only designs the CPUs but also manufactures them at its own facilities. Most of its rivals outsource the manufacturing process to companies like Taiwan Semiconductor Manufacturing Co. Intel's foundry revenue increased 16% to $5.4 billion in the quarter, though much of that revenue stemmed from manufacturing its own chips. The company has brought some interesting new products onto the market in recent months. Its new Xeon 6+ data center processors went on sale in March, while its Core Ultra Series 3 processors for personal computers and laptops hit the market in January. Also this year, Google LLC committed to buying millions of Intel's CPUs to power AI workloads in its own data centers. Those new chips are made on Intel's most advanced 18A process node at a massive new chip fab in Arizona, which is technologically similar to TSMC's 2-nanometer process. However, Intel has struggled to secure orders from other chipmakers, despite stating its ambitions to do so and grow its foundry business. The challenge for Intel is that it's recovering from years of delays on earlier node generations, not to mention teething problems at the new Arizona facility, where some of its 18A wafers have suffered defects, leading to lower production yields compared to its rival. Intel is currently working on finalizing its newest 14A process node, which is slated to go live in 2028. The company had previously said it would wait until it landed a significant new customer before moving forward with the expense of getting that new process up and running, but Tan appeared to backtrack in January, when he suddenly insisted that the company is "going big time" into the new process. On the call, Tan told analysts that "multiple customers" are currently evaluating the 14A process technology, and that development is accelerating faster than what the company saw with its 18A process. There has been speculation that some of those customers might be Elon Musk's Tesla Inc. and xAI Corp., though it's not clear exactly what kind of arrangement is planned. Earlier this month, Intel revealed that it will be collaborating with Tesla on its new Terafab chip complex being built in Austin, Texas, helping to "design, fabricate and package ultra-high performance chips" that will also be used by Musk's rocket company SpaceX Corp. During Tesla's earnings call this week, Musk revealed that the automaker wants to use Intel's 14A process to manufacture chips at Terafab, and said that by the time the new facility scales up, the process will "probably be fairly mature or ready for prime time." Tan elaborated on Musk's comments today, saying that they both share a strong conviction "global semiconductor supply is not keeping pace with the rapid acceleration in demand," and that they're "looking for unconventional ways to improve manufacturing efficiency." Emarketer analyst Jacob Bourne told SiliconANGLE that Musk may not be the only customer that's waiting for Intel's 14A process to come online. "The domestic manufacturing story continues to pay dividends for Intel, with Tesla's 14A commitment hinting at more customers in the pipeline as geopolitics pushes AI buyers towards U.S.-based capacity," he said. "Server CPU demand tied to AI infrastructure buildouts is giving Intel a steadier revenue base that's less bound to the PC cycle, and so its turnaround is looking less like a hope-fueled blip and more like a steadier, long-term upward trajectory."

Intel is now trying to keep up with AI demand by using scrap dies

TL;DR: Intel reported $13.8 billion in Q1 2026 revenue, driven by strong datacenter, AI, and Foundry divisions. Improved yield management amid chip shortages boosted profits. Foundry secured Tesla for its 14A node and partnered with Google for AI infrastructure, while new chips like Panther Lake and Wildcat Lake launched successfully. Intel just had a very strong Q1 2026 earnings call, reporting $13.8 billion in revenue, up 7.2% year over year and well above industry experts' expectations. Much of this revenue came from Intel's datacenter and AI divisions, which brought in $5.1 billion, but another division that flew under the radar was Intel Foundry. Intel's in-house manufacturing facilities brought in $5.4 billion in revenue, which was also higher than expectations. It was widely known that the Foundry, despite a very solid long-term plan, was struggling to get off the ground in its early days. Intel CEO Lip-Bu Tan even expressed grave concerns about low yields and the Foundry's future. However, as reflected in the earnings call, the Foundry is now an integral part of Intel's business, and yields have slowly but surely improved. Turns out, Intel has been managing its yields very effectively amid the ongoing chip shortage. While demand for AI and data centers is skyrocketing, Intel is cutting costs and increasing yields by making the most of its silicon wafers. Ben Bajarin, CEO of Creative Strategies, says that Intel is salvaging what would be "scrap" or low-end dies and turning them into binned-down SKUs to improve yields. Amid the boom in Agentic AI, Intel is making moves on all fronts. Recently, their Foundry has secured a major win by signing Tesla as the first major external customer for their next-gen 14A node. They have also signed a deal with Google to use Xeon processors in their AI infrastructure. Their 18A node is also (finally) churning out chips, with Panther Lake and Wildcat Lake now hitting the market.

Intel Set for Record High as AI-Driven CPU Demand Powers Upbeat Forecast

April 24 (Reuters) - Intel shares jumped more than 22% ⁠in ⁠premarket trade on Friday as the ⁠chipmaker's robust revenue outlook signaled strong demand for the hardware needed to run advanced AI models. If gains hold through close, the shares are set to hit a record high for the first time since 2000, surpassing their dotcom-era peak. At around $81 per share, the chipmaker's valuation would rise about $75.3 billion. Intel missed the early AI boom after failing to challenge Nvidia's ⁠GPUs and falling ⁠behind Taiwan Semiconductor Manufacturing Company in advanced manufacturing, but demand for powerful central processing units (CPUs) for advanced AI systems is opening a new window. "The growing recognition of the role CPUs are playing in agentic AI workloads is a big factor," said Bob O'Donnell, president and chief analyst at TECHnalysis Research. "If the foundry business can start contributing in a meaningful way in 2027 -- as expected -- that should really show that company's turnaround is complete." CEO Lip-Bu Tan, ⁠brought in ⁠after years of missteps left ⁠Intel trailing in AI, has pushed asset sales, job cuts and cost controls, while securing backing from the U.S. government and partners such as SoftBank and ⁠Nvidia to support its manufacturing push. Intel shares have nearly tripled since the Trump administration announced its stake in August. The rally lifted sentiment across broader chip stocks. Rival Advanced Micro Devices rose 7%, while U.S.-listed shares of TSMC gained 3%. Intel forecast second-quarter revenue above Wall Street expectations on Thursday, with at least 14 brokerages raising their price targets on the stock ⁠following the results, according to data compiled by LSEG. Chief Financial Officer David Zinsner said part of ⁠the forecast reflected higher chip prices, while warning that execution risks in manufacturing could limit how much demand Intel captures. HSBC analysts said growing demand for Intel's Xeon server CPUs, which power data-center workloads including AI inference, could prove a key driver of Intel's comeback. FOUNDRY BOOST FROM TESLA DEAL Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions, securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk's planned Terafab AI chip complex. Zinsner declined to disclose financial terms of the deal, saying details were still being finalised. Ryuta Makino, analyst at Intel investor Gabelli Funds, said ⁠confirmation that Tesla plans to use Intel's 14A manufacturing process was a "huge win" for the chipmaker's bid to build a contract manufacturing business that can eventually rival TSMC. Intel last traded at around 90 times its 12-month forward earnings - its highest on record - much higher than AMD and Nvidia, which were last trading at 37.2 times and 22.1 times their 12-month forward earnings, respectively. (Reporting by Rashika Singh and Zaheer Kachwala in Bengaluru; Editing by Mrigank Dhaniwala)

Intel posts very strong Q1 2026 earnings as the AI boom starts to focus on CPUs

TL;DR: Intel exceeded Q1 2026 revenue expectations with $13.58 billion, driven by strong data center and AI divisions. Its foundry business is growing, securing Tesla as a key customer and collaborating with Google. New CPU launches and rising AI-driven CPU demand highlight Intel's expanding market presence and planned chip price increases. Intel just had its Q1 2026 earnings call, and it went better than many expected. In Q1 2026, Intel generated $13.58 billion in revenue, up 7.2% year over year. Industry experts had predicted $12.42 billion in revenue for this quarter, which Intel has clearly surpassed. Much of this revenue is down to Intel's data center and AI divisions, which brought in $5.1 billion this quarter. Revenue from external customers for Intel foundry was less than $200 million and was mostly centered around legacy wafer work. Intel's foundry division has been slow to get started, but now it seems like it's on its way up. With $5.4 billion in revenue generated in Q1, Intel's foundry business is starting to establish itself as a clear second option to TSMC. Intel needs to do that quickly, not just for its own sake, but also for the sake of the CPU industry. Intel's adjusted earnings per share rose to 29 cents, sending the stock up more than 15% shortly after. Intel has had some major wins for its foundry recently, especially with Tesla becoming the first external customer for the next-gen 14A production node. They have also (finally) ramped up production on the 18A node with Panther Lake and Wildcat Lake now rolling out. Intel has also joined forces with Google to deploy Xeon processors for its AI infrastructure and has joined Tesla in the ambitious TeraFab project. On the hardware releases side, Intel launched the Arrow Lake Refresh (200S Plus) and 200HX Plus CPUs for desktop and mobile this quarter. They also launched the Xeon 600 family for workstations, the Core Ultra Series 3 "Panther Lake", the Core Series 3 "Wildcat Lake", and the Core Series 2 for embedded and edge use. Safe to say it has been a busy quarter for Intel's consumer hardware division. Intel's overwhelmingly positive earnings call reflects a shift in the agentic AI demands over the past few months. While GPUs have largely dominated the AI ecosystem and remain the primary driving force, CPU demand has been increasing exponentially. This is why Arm, AMD, Meta, and Intel have put their chips in the AI CPU basket by releasing custom AI-focused silicon and making deals with each other to deploy them. Intel CEO Lip-Bu Tan also agrees that the aforementioned shift is significantly increasing demand for Intel CPUs and advanced packaging offerings. Intel is raising chip prices to offset production costs, as reflected in its Q2 guidance of $13.8 to $14.8 billion. Intel's ASIC business is also on track to bring in more than $1 billion in revenue this year.

US Stock Market: Intel's AI bet drives upbeat forecast and investor confidence

Intel projected second-quarter revenue above Wall Street expectations, signaling strong demand for its server processors used in artificial intelligence workloads across data centers, according to Reuters. The upbeat forecast reflects renewed momentum for the chipmaker as it attempts to regain ground in the rapidly evolving AI sector. The company expects revenue to be between $13.8 billion and $14.8 billion, surpassing analysts' estimates of $13.07 billion, based on LSEG data. Intel also issued adjusted earnings guidance of 20 cents per share for the quarter, significantly higher than expectations of 9 cents. Following the announcement, Intel's shares surged 19% in extended trading, adding roughly $64 billion to its market value and extending a strong rebound this year, Reuters reported. The improved outlook comes as CEO Lip-Bu Tan pushes a turnaround strategy aimed at stabilizing Intel's finances and restoring its competitive position. The plan includes asset sales, job cuts, and efforts to secure strategic investments and partnerships. Intel has also benefited from agreements involving the U.S. government, SoftBank, and Nvidia, which are expected to support its manufacturing ambitions and long-term growth. Although Intel lagged competitors during the early stages of the AI boom, the company is now targeting opportunities in advanced central processing units. As cloud providers increasingly shift from training AI models to deploying them, CPUs are becoming more relevant for handling workloads tied to autonomous AI systems and reasoning-based applications. Tan indicated that customer demand is already reflecting this shift, reinforcing Intel's confidence in its product pipeline. The company has also raised chip prices to offset rising production costs, contributing to its stronger revenue outlook. However, its ability to meet demand will depend on maintaining large-scale manufacturing capacity without supply disruptions. In a notable development for its foundry business, Intel secured Tesla as a major customer for its next-generation 14A chipmaking process, part of Elon Musk's Terafab project in Texas. While financial details remain undisclosed, the partnership marks a significant step in Intel's effort to expand its contract manufacturing operations. Industry observers note that Intel's long-term strategy remains high-risk, hinging on its ability to transform into a competitive foundry player capable of challenging established leaders. Success in capturing demand from emerging technologies such as robotics and agentic AI could significantly reshape its valuation over time, Reuters reported. Intel's foundry division generated $5.4 billion in first-quarter revenue, though the majority came from internal business, with less than $200 million attributed to external customers. The company's custom chip segment is expected to exceed $1 billion in revenue this year. First-quarter results also exceeded expectations, with total revenue reaching $13.58 billion compared to estimates of $12.42 billion. Data center and AI segment revenue came in at $5.1 billion, ahead of projections of $4.41 billion. The company reported a loss per share of 73 cents due to restructuring charges exceeding $4 billion, but posted adjusted earnings of 29 cents per share, well above expectations, Reuters said. Despite the positive momentum, Intel continues to face intense competition from other semiconductor firms seeking to capitalize on the growing AI market.

Intel Is Now Selling CPU Dies It Used to Throw in the Trash, as AI Demand Turns Scrap Into Profits

Intel is not only rolling right now, but also operating smartly, driving its revenue up by salvaging CPU dies and selling them off to hungry AI customers. CPU demand is going off the charts as AI inferencing continues to surge with the arrival of Agentic AI. In countless posts, we have stated why CPUs have become so important for AI, a market that was previously dominated by GPUs. Now, AI inferencing is going after CPUs and Memory, in a big way, and leading firms such as Intel are all boosting their capacities to meet the demand. Intel's recent earnings were very positive, and some of the key revenue drivers were the above seasonal Q1 through "strong execution and growing supply". Intel is primarily a CPU maker, and its Xeon chips land in major datacenters, AI firms, and servers across the globe. So with CPU demand spiraling up, Intel was one of the companies expected to see a big boost. But in further clarification provided to Ben Bajarin of Creative Strategies, it looks like the major revenue driver came from something unexpected. Intel's Xeon CPUs are produced in-house at the company's own fabrication plants. Each wafer that comes out has a specific yield, and in a standard procedure, most of the chips in the middle of the wafer are usable, whereas the chips around the edge are deemed as "lower-value". These are often reused in lower-end products or thrown out entirely. This time, due to the unprecedented demand for CPUs in the AI markets, Intel reused these dies by binning them down and sold them into actual usable products. And once again, CPU demand being so high meant that customers were even willing to purchase these chips. This shows just how much of a scarcity there is of CPUs right now that customers are even willing to utilize low-end dies to meet requirements. And other CPU makers are also expected to be doing the same. AMD produces its chips at TSMC, and they can leverage low-end dies into usable products, too. The same goes for everyone else. These dies were of no use previously; now they are actually an additional revenue driver for chipmakers.

Intel's Data Center Revenue Grows 22 Percent Amid Pent-Up AI Demand

The semiconductor giant says that it expects double-digit year-over-year growth to continue for its data center business with "multiple long-term supply agreements with key customers" in place as it sees pent-up demand for CPUs in AI data centers. Intel is finally starting to feel the benefits of the AI infrastructure boom, with the chipmaker reporting data center revenue growing 22 percent year over year in the first quarter. The Santa Clara, Calif.-based company reported first-quarter earnings on Wednesday, saying that its revenue for the period grew 7 percent year-over-year to $13.6 billion, largely thanks to the double-digit growth of its data center business. This was well above the $12.4 billion average estimate by Wall Street analysts, even exceeding the high-end estimate. [Related: Arm Exec: New AGI CPU Has Big On-Prem Potential -- But Limited Channel Play For Now] Intel's stock price was up more than 14 percent in after-hours trading. While the semiconductor giant remains behind Nvidia and other rivals in developing competitive accelerator chips for the market, the chipmaker is seeing pent-up demand for server CPUs to power AI workloads in such environments. This has resulted in a shortage of Intel CPUs, which has likely impacted every partner "across the board," including OEMs and cloud service providers, the company's global channel chief, Dave Guzzi, told CRN in a February interview. Intel CFO David Zinsner said the company's first-quarter financial performance reflected the "growing and essential role of the CPU in the AI era and unprecedented demand for silicon as well as our disciplined execution to expand available supply." "We remain focused on maximizing our factory network to improve available supply and meet our customers' needs throughout the year," he said in a statement. The company's first-quarter data center revenue was $5.1 billion. In its earnings presentation, Intel called its CPUs "foundational" to inference and agentic AI workloads as the CPU-to-accelerator ratio narrows, resulting in a greater number of CPUs needed in relation to accelerator chips like GPUs deployed into data centers. The company said that it expects double-digit year-over-year growth to continue with "multiple long-term supply agreements with key customers" in place. "The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic," said Intel CEO Lip-Bu Tan in a statement. "This shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings." In Intel's PC business, first-quarter revenue grew 1 percent year-over-year to $7.7 billion despite "growing inflationary pressure," the company noted in the presentation. The chipmaker also said its Core Ultra Series 3 processors marked the "best product launch" it has seen in five years for the business unit.

Intel Raises Q2 Revenue Guidance as AI and Cloud Deals Boost Performance

He added, "This shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings." The company also reported stronger adoption of Xeon processors and Gaudi AI accelerators across data center customers. Intel secured several agreements during the quarter. The company entered a partnership with , which is expected to support chip production for SpaceX, xAI, and Tesla. It also signed a multiyear agreement with Google to supply Xeon CPUs for AI and cloud workloads. These deals expanded Intel's position in enterprise and hyperscale computing markets. The company also announced plans to repurchase a 49% stake in a fabrication facility previously sold to Apollo for $11.2 billion. The is set at $14.2 billion, marking a shift in its manufacturing strategy. Intel also continues restructuring efforts that include workforce reductions and consolidation of production sites. The company continued restructuring efforts carried out in recent years, including workforce reductions and consolidation of factory operations. Furthermore, Industry data from International Data Corporation projected global PC shipments to decline 11.3% in 2026, although revenue may grow due to higher prices. Intel also noted supply constraints in parts of its business as demand continues to outpace production capacity in selected segments.

Investor Outlook: Intel rally driven by rising AI chip demand

Intel shares are surging after strong earnings highlighted a sharp rise in demand for central processing units, as artificial intelligence workloads shift beyond training to real-world applications. BNN Bloomberg spoke with Gil Luria, head of technology research at D.A. Davidson, about how evolving AI use cases are driving CPU demand and what risks remain for Intel despite the rally. Read the full transcript below: ANDREW: Shares in Intel on fire today. I'm kind of confused as to why this is only coming up now, but it seems the central processing units for computers that's long been Intel's specialty are also important to AI. Let's get more from Gil Luria, head of technology research at D.A. Davidson. Gil, maybe you can help me with this. So are investors only finding out now that these CPUs are so important? GIL: Things are moving fast, and it's really just over the last few weeks that we've realized how much more we need CPUs. And the math around this is that when you're doing pre-training for AI, when you're just preparing the models, you need about one CPU for every eight GPUs. By the time you're doing agentic tasks for AI, it's more of a one-to-one ratio. So if we've just needed a lot of GPUs up until now, now we also need a lot of CPUs to execute the tasks that we're setting these AI agents to do, and that's just really over the last few weeks. Let's not forget the big revolution around agents really just started in December with some of the Anthropic models. But now, as that's happening, the demand for CPU is going off the charts. The most interesting anecdote from Intel yesterday was that they were selling previously written-down CPUs, which is to say they took them out of the trash in order to sell them, and they were still able to do that. So that tells you how much the demand has picked up over a matter of a couple of months, a few weeks. ANDREW: That's interesting. So training the AI takes vast amounts of these graphics processing units, but actually running the programs you do need lots of CPUs. GIL: Yes. Now that doesn't mean you don't need the GPU. It's just that for the actual actions, to make the compute efficient, you want to use CPUs. Think about it this way: what does an agent do? The agent is doing cognitive tasks that a human would otherwise do, and most of those tasks right now happen on a CPU. When we work on a computer, we're using the CPU. So if a computer is doing a task that otherwise we would have been doing, it's using the CPU. That doesn't mean you don't need the GPU for the actual inference or the actual computations that tell you what task to do. It just means that to carry out the task, you now need a CPU. ANDREW: You are hiking your target price on Intel to $77 from $45 US, but you're maintaining a neutral rating. Walk us through your thinking there, please. GIL: There's still so much risk with Intel. We're all valuing Intel based on its product business, in spite of the fact that the foundry business, the fab, is losing a tremendous amount of money. So that means that we're all implicitly saying we believe that the fab will at some point stop losing money, maybe even make money, but that's a really big if statement. But by their own account, for their next node to work, they still need to sign up new customers. Even the deal with Elon about the Terra fab may not be enough to decide to invest in the next generation of a node, the 14A node. And so we don't even know that that business will stop losing money, and that's what we're all assuming in order to value Intel. So the point is, there's a lot of risk. If the fab side doesn't turn around, they'll continue to lose a lot of money there, and then the overall company will still lose money. Just to give you context how badly Intel is underperforming, Intel's margins were 39 per cent this quarter. That was a big positive surprise. AMD's are 55 per cent. Nvidia, Broadcom, TSMC, 75 per cent. Intel is still a very big underperformer, and it's not clear that they can get out of that. All that's clear, the demand for CPUs is so high, the tide is rising so fast that it's even lifting Intel's boat. ANDREW: So you mentioned Terra fab. So that is a giant semiconductor plant that is apparently scheduled for Texas. Elon Musk is involved, Tesla, xAI, SpaceX and Intel. Give us a bit of background there. So Intel is partnered with Elon Musk in this thing. GIL: Yeah, it's unclear what their role is. What we do know is that Tesla intends to use the 14A technology, the next node technology from Intel, for the Terra fab. But it's going to be an Elon plant. It's not going to be an Intel plant. That's what it looks like. The details still haven't been worked out. This may not even happen until 2028, or at least not open until 2028, so we don't know a lot of details. We just know that this is Elon scale, right? So it'll be the biggest plant ever, and he'll probably build it faster than anybody's ever built a plant, or at least that's his intention. And it is a big deal that they picked Intel's technology to do that, yeah, but again, it may not be enough, because Lip-Bu Tan clarified again yesterday they are still not committed to building out the fabs for 14A. They still need more customers. They're in the process of having customers test out the technology, and they may be able to sign large customers. Again, the hope is an Nvidia or an Apple or something like that that's big enough to commit to the technology, to commit to building fabs. The Terra fab itself will use the technology. It's not clear that it'll be an Intel plant. It may be an Elon plant. ANDREW: Gil, thank you very much indeed. Great hearing from you. Gil Luria, head of technology research at D.A. Davidson. ---

Intel shares skyrocket to all-time high as AI boom triggers remarkable turnaround

Demand for Intel's central processors from firms offering AI services was so strong in the first quarter that it sold even chips it had originally written off, a remarkable turnaround that sent the company's shares soaring on Friday. The stock surged more than 20% to $83 in midday trading, surpassing its dot-com era peak in 2000 and taking the company's market value above $416 billion. The stock hit a record high of $85.22 earlier in the session. Rival AMD and Arm also gained more than 11% each on growing conviction that inference -- the process by which artificial intelligence answers user queries -- could restore central processing units to the heart of the industry after years of being eclipsed by graphics chips used in AI training. Nvidia, the graphics chip giant that has dominated the AI boom, has also sensed the shift and braced for greater competition. It unveiled last month a new central processor, a rare move into territory it had long ceded to rivals. Its shares were up more than 1% on Friday. At least 23 brokerages raised their price targets on Intel's stock following the better-than-expected first-quarter results and a sales forecast above estimates, with HSBC pointing to growing demand for Intel's Xeon server CPUs used in AI data centers. The stock currently has a median price target of $75, up from $46.50 a month ago. Intel CFO David Zinsner said the forecast was partly driven by higher prices and supply was tight in the first quarter, which forced Intel to dig into finished goods inventory and sell chips it had not expected to move. "It was either de-spec product or legacy product we had shelved and then we worked with customers. That helped a lot. I am not sure we have that benefit in the second quarter," he said. Including Friday's gains, Intel shares have jumped more than 120% this year, after a surge of about 84% last year, as its turnaround gathers steam under CEO Lip-Bu Tan after years of missteps. It now trades at around 90 times its 12-month forward earnings estimates - its highest on record - much higher than the 37 times for AMD and 22 for Nvidia. Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions by securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk's planned Terafab AI chip complex. "If the foundry business can start contributing in a meaningful way in 2027 - as expected - that should really show that the company's turnaround is complete," said Bob O'Donnell, president and chief analyst at TECHnalysis Research.

Intel soars on signs AI boom for CPUs is here

Demand for Intel's central processors from firms offering AI services was so strong in the first quarter that it sold even chips it had originally written off, a remarkable turnaround that sent the company's shares soaring on Friday. The stock, up 29 per cent premarket at US$86, was set to open at a high that would surpass its dot-com era peak in 2000, taking the company's market value above $420 billion. Rival AMD and Arm also gained more than seven per cent each on growing conviction that inference - the process by which artificial intelligence answers user queries - could restore central processing units to the heart of the industry after years of being eclipsed by graphics chips used in AI training. Nvidia, the graphics chip giant that has dominated the AI boom, has also sensed the shift and braced for greater competition. It unveiled last month a new central processor, a rare move into territory it had long ceded to rivals. Its shares were little changed on Friday. At least 14 brokerages raised their price targets on Intel's stock following the better-than-expected first-quarter results and a sales forecast above estimates, with HSBC pointing to growing demand for Intel's Xeon server CPUs used in AI data centers. CFO David Zinsner said the forecast was partly driven by higher prices and supply was tight in the first quarter, which forced Intel to dig into finished goods inventory and sell chips it had not expected to move. "It was either de-spec product or legacy product we had shelved and then we worked with customers. That helped a lot. I am not sure we have that benefit in the second quarter," he said. Intel shares have already gained about 80% this year, after a jump of about 84% last year, as its turnaround gathers steam under CEO Lip-Bu Tan after years of missteps. It now trades at around 90 times its 12-month forward earnings estimates - its highest on record - much higher than the 37 times for AMD and 22 for Nvidia. Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions by securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk's planned Terafab AI chip complex. "If the foundry business can start contributing in a meaningful way in 2027 - as expected - that should really show that the company's turnaround is complete," said Bob O'Donnell, president and chief analyst at TECHnalysis Research.

Intel set for record high as AI-driven CPU demand powers upbeat forecast

April 24 (Reuters) - Intel shares jumped more than 22% in premarket trade on Friday as the chipmaker's robust revenue outlook signaled strong demand for the hardware needed to run advanced AI models. If gains hold through close, the shares are set to hit a record high for the first time since 2000, surpassing their dotcom-era peak. At around $81 per share, the chipmaker's valuation would rise about $75.3 billion. Intel missed the early AI boom after failing to challenge Nvidia's GPUs and falling behind Taiwan Semiconductor Manufacturing Company in advanced manufacturing, but demand for powerful central processing units (CPUs) for advanced AI systems is opening a new window. "The growing recognition of the role CPUs are playing in agentic AI workloads is a big factor," said Bob O'Donnell, president and chief analyst at TECHnalysis Research. "If the foundry business can start contributing in a meaningful way in 2027--as expected--that should really show that company's turnaround is complete." CEO Lip-Bu Tan, brought in after years of missteps left Intel trailing in AI, has pushed asset sales, job cuts and cost controls, while securing backing from the U.S. government and partners such as SoftBank and Nvidia to support its manufacturing push. Intel shares have nearly tripled since the Trump administration announced its stake in August. The rally lifted sentiment across broader chip stocks. Rival Advanced Micro Devices rose 7%, while U.S.-listed shares of TSMC gained 3%. Intel forecast second-quarter revenue above Wall Street expectations on Thursday, with at least 14 brokerages raising their price targets on the stock following the results, according to data compiled by LSEG. Chief Financial Officer David Zinsner said part of the forecast reflected higher chip prices, while warning that execution risks in manufacturing could limit how much demand Intel captures. HSBC analysts said growing demand for Intel's Xeon server CPUs, which power data-center workloads including AI inference, could prove a key driver of Intel's comeback. FOUNDRY BOOST FROM TESLA DEAL Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions, securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk's planned Terafab AI chip complex. Zinsner declined to disclose financial terms of the deal, saying details were still being finalised. Ryuta Makino, analyst at Intel investor Gabelli Funds, said confirmation that Tesla plans to use Intel's 14A manufacturing process was a "huge win" for the chipmaker's bid to build a contract manufacturing business that can eventually rival TSMC. Intel last traded at around 90 times its 12-month forward earnings - its highest on record - much higher than AMD and Nvidia, which were last trading at 37.2 times and 22.1 times their 12-month forward earnings, respectively. (Reporting by Rashika Singh and Zaheer Kachwala in Bengaluru; Editing by Mrigank Dhaniwala)

Intel shares surge as AI drives first-quarter revenue jump

Intel shares surged Thursday after the company posted a jump in first quarter revenue on booming demand for its AI server processors. The stock jumped 19% in extended trade, extending its 81% rebound so far this year. First-quarter revenue came in at almost $13.6 billion, beating estimates. The company also forecast second-quarter revenue of up to $14.8 billion, well above Wall Street expectations. After missing out on the early years of the AI boom, a new opportunity has emerged for Intel in the form of advanced central processing units. They're better suited to running AI agents than the graphics processing units that have so far been dominant in developing AI. However, Intel's ability to meet demand still depends on whether it can continue to manufacture processors at scale without bottlenecks and supply issues. Competition in the CPU space also looks set to mount, with rivals Nvidia, AMD and Arm all making plans for that market.

Intel forecasts second-quarter revenue above estimates

April 23 (Reuters) - Intel forecast second-quarter revenue above Wall Street expectations on Thursday, underscoring booming demand for the chipmaker's server chips used in artificial-intelligence data centers. Intel shares jumped roughly 12% in extended trading on Thursday. The company expects revenue of between $13.8 billion and $14.8 billion, compared with an estimate of $13.07 billion, according to data compiled by LSEG. After years of management blunders left the former icon of chipmaking without a meaningful foothold in the booming artificial-intelligence industry, CEO Lip-Bu Tan put a revival plan in place to shore up Intel's balance sheet through asset sales and layoffs. Tan also secured large investments and struck deals with the U.S. government, SoftBank and Nvidia, giving Intel much-needed fuel to put into its manufacturing operations and inspire strong investor confidence in the firm's longer-term growth. While Intel missed out on the early years of the AI boom, a new opportunity in the form of advanced central processing units (CPUs) has emerged as cloud providers shift from training models to deploying them. INTEL'S CPU OPPORTUNITY "The CPU (is) having a renaissance here," finance chief Dave Zinsner said in an interview with Reuters. "We're starting to be a meaningful beneficiary of the AI investments that are happening." While graphic processing units (GPUs) are used to process large-scale mathematical operations required to generate content, CPUs are better suited to handle workloads done by autonomous AI agents with reasoning capabilities. However, Intel's ability to meet demand still depends on whether the company can continue to manufacture its processors at scale and without bottlenecks and supply issues. Intel on Wednesday landed a win for its manufacturing business, securing Elon Musk's Tesla as its first major customer for the next-generation 14A process to make chips at its Terafab project, an advanced AI chip complex Musk has envisioned in Austin, Texas. Intel earlier this month expanded its AI CPU partnership with Alphabet's Google, and joined Musk's Terafab AI chip complex project with SpaceX and Tesla to make processors powering robotics and data centers. First-quarter revenue came in at $13.58 billion, beating estimates of $12.42 billion. Revenue in the company's data center and AI segment came in at $5.1 billion, compared with estimates of $4.41 billion. Intel's shares have jumped over 80% so far this year, and nearly 48% in April, as investors bet heavily on the CPU - the kind of processor Intel has championed for decades and built its business around. Competition in the CPU space, however, remains high, as rivals Nvidia, Advanced Micro Devices, and Arm also eye the market and roll out products to get ahead. Intel reported a first-quarter loss per share of 73 cents as it incurred more than $4 billion in restructuring charges. On an adjusted basis, the company earned 29 cents per share, beating the estimate of 1 cent. (Reporting by Zaheer Kachwala in Bengaluru and Max A. Cherney and Stephen Nellis in San Francisco; Editing by Pooja Desai and Matthew Lewis)