Intel has posted the best quarter in its recent history. The company closed Q2 2026 with revenues of $16.128 billion, a 25% increase from a year ago and well above Wall Street forecasts. This represents the highest year-over-year growth the manufacturer has seen in over fifteen years, driven by rising demand for AI infrastructure and the recovery of its data center business.
The key points of Intel’s results in 20 seconds
- Intel increased its revenue by 25% year-over-year to $16.128 billion, its highest growth in over 15 years.
- The Data Center and AI division was the main driver of the quarter, with a growth of 59%.
- The company attributes much of the demand to the boom in infrastructure needed to deploy artificial intelligence, especially AI agent workloads.
- Intel will also boost its manufacturing capacity investments to meet increasing demand and accelerate the development of Intel Foundry.
The figures not only surpassed analyst expectations, who predicted revenues close to $14.420 billion, but also improved forecasts for the next quarter. Intel expects to generate between $15.8 billion and $16.8 billion in the third quarter, compared to roughly $15.1 billion predicted by market consensus. The announcement was well received by investors, and shares rose more than 5% following the release of the results.
Artificial intelligence puts CPUs back in the spotlight
In recent years, conversations about artificial intelligence have been dominated by NVIDIA GPUs and, to a lesser extent, AMD. However, Intel’s results show that market growth is also driving demand for traditional server processors.
The Data Center and AI (DCAI) division reported $6.262 billion in revenue, a 59% increase compared to the same quarter in 2025, clearly beating analyst estimates.
| Division | Q2 2026 Revenue | Annual Change |
|---|---|---|
| Data Center and AI | $6.262B | +59% |
| Client and Physical AI | $8.877B | +13% |
| Intel Foundry | $5.765B | +31% |
| Total Revenue | $16.128B | +25% |
While AI accelerators attract much investment, modern data centers require much more than GPUs. Xeon processors remain essential for preparing data, running databases, coordinating accelerators, managing storage, virtualization, networking, and executing much of the logic in enterprise applications.
Intel believes this trend is accelerating with the advent of so-called agent AI, where multiple autonomous agents collaborate to solve complex tasks, consult databases, run tools, or interact with external applications. This kind of workload increases CPU usage besides GPU, as much of the system orchestration continues to run on general-purpose processors.
The company states that demand for processors for this infrastructure has, at times, exceeded its manufacturing capacity, prompting it to increase investments in equipment, clean rooms, and substrates to boost supply in upcoming quarters. It has also signed supply contracts lasting three to five years for data center processors and specialized chips, providing greater visibility into future revenues.
The PC business also improves
The client computing area, now called Client Computing and Physical AI Group, also contributed to the quarter’s growth.
The division reported $8.877 billion, a 13% increase year-over-year. Intel explained that the growth was not due to an increase in the number of processors sold but to a strategy focused on higher-value products with better margins.
From an accounting perspective, the company posted a net loss of $11.033 billion. However, this figure was affected by a special adjustment of $12.529 billion related to escrowed shares within the agreement with the US government under the CHIPS Act. Excluding these effects, Intel achieved an adjusted net profit of $2.197 billion.
Intel Foundry accelerates as confidence in Intel 18A grows
The other major news from the quarter came from Intel Foundry.
The manufacturing division generated $5.765 billion, a 31% increase compared to the previous year. Still, most of that revenue continues to come from internal Intel orders, so interdivisional transactions were eliminated on paper, totaling $5.477 billion. Foundry operations still register operational losses, though these have decreased from $3.168 billion to $2.089 billion, a significant improvement from the previous year.
Intel highlighted several advancements in its technological roadmap:
- Intel 18A-P has already entered risk production.
- Some future Core Ultra Series 3 (Panther Lake) processors are already being built in volume using High-NA EUV tools from ASML.
- The company introduced Xeon 6+, the first server processor fabricated with the Intel 18A node.
- Intel maintains its goal of bringing Intel 14A into high-volume production by 2028.
Due to increased demand, Intel also announced it will increase its investments this year in machinery, industrial capacity, and fabrication equipment to support both its own products and the expected growth in Intel Foundry.
It’s worth noting that recent reports suggest potential future agreements with major chip designers such as AMD, NVIDIA, and OpenAI to manufacture some of their products using Intel’s 18A and 14A nodes. However, Intel has not officially confirmed these contracts, so for now, they remain industry rumors.
Is Intel entering a new phase?
After several years marked by market share losses, technological delays, and intense competitive pressure, Intel seems to be finding new momentum thanks to the growth in AI infrastructure.
Although NVIDIA continues to dominate the accelerator market and TSMC leads advanced semiconductor manufacturing, the results show that AI expansion benefits the entire value chain. GPUs need CPUs to coordinate workloads, storage, networking, and services, restoring the prominence of the Intel Xeon family.
The big question will be whether this growth can be sustained over the coming quarters and if Intel Foundry can turn its technological improvements into significant contracts with external clients. If successful, the company could be starting a much deeper recovery than it seemed just a year ago.
Frequently Asked Questions
Why did Intel grow so much this quarter?
Primarily due to the strong increase in demand for data center and AI infrastructure processors, along with improvements in execution and manufacturing yields.
Which division drove the results?
Data Center and AI was the fastest-growing unit, increasing its revenue by 59% compared to the same period last year.
Is Intel still losing money?
From an accounting standpoint, yes, but losses were affected by an extraordinary adjustment related to the CHIPS Act agreement. Excluding that effect, Intel achieved an adjusted net profit of $2.197 billion.
Is Intel Foundry now profitable?
Not yet. The division still reports operational losses, although these have decreased significantly this quarter, and Intel remains committed to its 18A and 14A nodes.
