Intel posted its strongest revenue growth in over 15 years, fueled by high demand for x86 processors and AI infrastructure as manufacturing and operational improvements deliver results.
Revenue jumps as AI and x86 demand exceeds supply
During the second fiscal quarter 2026 earnings call, CEO Lip-Bu Tan told analysts Intel surpassed revenue, gross margin, and earnings per share guidance for the seventh straight quarter.
Tan credited the growth to strong demand for Intel’s products that continues to outpace expanding supply. “Our design manufacturing execution is improving, and the operating discipline we implemented 15 months ago is producing measurable results,” he stated.
The improvements reflect internal changes to make Intel more agile and customer-focused, including tighter operations and closer partner engagement. One key example is the expanded collaboration with Google Cloud, part of a broader effort to embed an AI-first approach across all operations.
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Manufacturing execution improves as Intel ramps advanced nodes
Tan highlighted progress in the foundry business, where factories running Intel 7, Intel 3, and Intel 18A nodes exceeded internal volume targets. Yields, cycle times, and wafer starts all improved, with Intel 18A output rising during the quarter and yields surpassing expectations.
“We are now ramping multiple new products on 18A while supporting growing demand for lead products, including Panther Lake and Wildcat Lake,” Tan said. He noted Intel 14A is advancing well, with defect density and transistor performance already ahead of where 18A stood at the same stage.
The company also launched Xeon 6+, codenamed Clearwater Forest, its first server-class product built on the 18A node. CFO David Zinsner said the Data Center AI Group introduced new connectivity products.
Intel’s design services business, combining its x86 franchise, IP, and advanced packaging, nearly tripled its revenue compared to the previous year. The company is positioned to develop purpose-built AI-era products for networking, compute, and acceleration.
The AI buildout is creating opportunities across Intel’s product lines, particularly as the industry faces constraints in leading-edge logic, wafers, memory, and substrates. As AI expands from training to inference and into agentic systems, general-purpose server CPU density continues to rise. The core server CPU franchise is growing faster than ever.
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For customers seeking alternatives in a tight semiconductor market, Intel’s foundry business is central to its recovery. The company expects third-quarter revenue between $15.8 billion and $16.8 billion, up from $13.7 billion in the same period last year. Non-GAAP earnings per share are projected at 38 cents, compared to 23 cents a year earlier.
Tan outlined clear priorities: strengthen x86 leadership and build the foundry into a world-class wafer and packaging business. “Our strategy is delivering early results, and I’m confident Intel is well positioned to help define the next era of computing innovation,” he said.
The turnaround involves more than financials—it’s about reclaiming leadership in an increasingly competitive industry. For years, Intel faced manufacturing delays and lost ground to rivals like AMD and Nvidia. Now, with AI demand transforming the market, the company is betting its combination of x86 processors, advanced packaging, and foundry services can provide a lasting advantage.
Execution will determine whether this momentum holds. The coming quarters will reveal if Intel’s growth is sustainable or just a temporary rebound in a volatile market.
