Intel Corporation (NASDAQ:INTC) had its best quarter in nearly 15 years. The firm made $16.1 billion in sales, up 25% from a year ago, way more than the $14.42 billion analysts expected. Adjusted profit came in at 42 cents a share, double the 21 cents Wall Street expected. The stock jumped about 4-5% after hours. For the next quarter, Intel expects to make between $15.8 billion and $16.8 billion, well above the $15.1 billion analysts had guessed.
Why This Happened
Most of the AI boom so far has been about graphics chips, the kind Nvidia makes. Intel makes a different kind of chip, called CPUs, and those weren’t as central to the AI story until recently. That’s changing. A new wave of AI, called “agentic AI,” uses AI systems to actually carry out tasks, like writing computer code, on their own. Running that kind of AI needs a lot of CPU power too, and that’s exactly what Intel sells. The company’s data center chip sales jumped 59% this quarter. CEO Lip-Bu Tan said in a statement, “AI is driving unprecedented demand for compute.” Intel’s finance chief, David Zinsner, said the firm can’t make chips fast enough to meet demand right now, and he told analysts that “customers continue to signal a strong and sustainable spending environment.”
This isn’t Intel’s first sign of life this year either. The stock is up more than 154% in 2026 so far. But it’s also been a rough month, and shares fell 28% in July alone before this report, and they’re still down more than 25% from their record high set on June 22. So this jump is a bounce-back, not a stock making new highs.
That raises a real question. Is Intel’s turnaround actually happening now, or is this one good quarter inside a stock that’s still recovering from a much bigger recent drop?
The Bull Case
Intel Corporation (NASDAQ:INTC)’s own numbers back up a real recovery, not just AI hype. Its profit margin jumped to about 42%, up from just 2.5% a year ago because of agentic AI, which drove real demand growth in Intel’s data center chips. Intel sold more of those and also got better prices. Its PC business grew too, but from higher prices on fewer units sold, not from selling more chips.
Intel signed 10 long-term deals with data center customers, some locking in prices and some locking in how much they’ll buy, a sign customers are committing to Intel for years, not just this quarter. The company’s chip-manufacturing business, called its foundry, grew sales 31% and brought in $5.8 billion, beating expectations. Intel is now “fully committed” to a new, more advanced manufacturing process called 14A, something it had warned it might have to abandon just last year if it couldn’t find a big customer. It has already signed Tesla as a customer for that process, for a project called “Terafab.” Trump announced in April that Apple had agreed to have Intel make some of its chips too, though neither firm has directly confirmed that deal yet.
