Intel Q2 earnings crush: 25% revenue growth, data center up 59%, 11% stock pop

Intel reported Q2 2026 results Thursday with its fastest revenue growth in 15 years, jumping 25% to $16.1 billion on a 59% surge in data center sales. Adjusted earnings per share hit 42 cents versus 21 cents consensus; full-year guidance of 38 cents EPS exceeded analyst expectations. The stock jumped 11% in extended trading, bouncing hard from a 28% July decline.

The data center beat signals AI infrastructure demand is flooding Intel's server CPU franchise. Client computing (PCs) grew 13% to $8.9 billion but faces flat Q3 guidance due to memory shortages. Intel's foundry division, where the company is betting to become a contract manufacturer, generated $5.8 billion in revenue, up 31% annually but still barely profitable. The company is locking in long-term agreements with customers at fixed pricing—a defensive move common in memory to preserve margin if AI demand softens.

For infrastructure teams, the timing matters: Intel is guiding a 'meaningful increase' in capex next year as it races to scale advanced nodes (14A is ahead of historical cycle timelines). Gross margin recovered to 42% from 2.5% year-ago, driven by mix and scale—a 20-point lift that won't hold if supply normalizes. The CPU advantage in AI inferencing remains narrower than GPU, but Intel's 25% growth and OEM lock-in strategies suggest the company is capturing meaningful share of the inference CPUs-and-accelerators-plus-interconnect bundles that cloud giants are building.