Intc shares surged on Thursday after the chipmaker posted strong earnings and lifted its near-term outlook, with the stock rising as much as 20% in after-hours trading. The move came after Intc projected current-quarter revenue of $13. 8 billion to $14. 8 billion, above Wall Street expectations, and framed the results as evidence of a major turnaround. Chief executive Lip-Bu Tan said the company is seeing a “fundamentally different” business as AI demand builds.
Revenue outlook lifts Intc after strong quarter
The latest update centered on the company’s forecast and a first-quarter performance that came in ahead of analyst estimates. Intc reported revenue of $13. 6 billion in the first quarter, up about 7% from a year earlier and above the $12. 4 billion average estimate compiled by Visible Alpha. Data centre and AI products brought in $5. 1 billion in revenue in the quarter, a figure that helped reinforce the company’s message that demand is improving.
The guidance matters because investors have been watching for signs that Intc can convert spending and restructuring into sustained growth. Tan told investors the company’s revival efforts were “bearing fruit, ” saying that a year ago the conversation was whether Intc could survive, while now it is about how quickly the company can add manufacturing capacity to meet demand. He said the current environment is being shaped by an AI-driven appetite for Intel’s central processing units and related products.
AI demand, manufacturing, and investor confidence
Intc’s management said the shift from AI model training to the “inference” computing needed to run those models means more CPUs are required for each GPU. Tan described the CPU as an “indispensable foundation of the AI era, ” arguing that the role of the processor is becoming more important as AI infrastructure expands.
The company also noted that its chip manufacturing business posted revenue of $5. 4 billion, above analyst expectations of $4. 6 billion. David Zinsner, chief financial officer at Intc, cautioned that the broader chip industry is still under pressure from constrained supply of memory, wafers, and other critical supplies.
What investors and officials are watching next
The results added to momentum that has already pushed Intc shares up more than 50% in the past month. The stock has also gained since a deal last summer under which the US government took a 10% stake in the company, followed by investments from Nvidia and SoftBank. Intc has also drawn support from a partnership with Elon Musk on his Terafab chipmaking facility and from its decision to repurchase its equity stake in a chip factory in Ireland from Apollo.
Intc reported a net loss of $3. 7 billion, tied to a $3. 8 billion writedown of goodwill related to its 2017 acquisition of Mobileye, though it posted adjusted net income of $1. 5 billion. For now, the market is focused on whether the stronger revenue outlook, AI data-centre demand, and manufacturing progress can keep the Intc rally going in the weeks ahead.
