Intel raised its revenue outlook for the second quarter, forecasting sales between $13.8 billion and $14.8 billion - a figure that exceeds the Wall Street consensus estimate of $13.07 billion. Investors reacted quickly, sending the stock up roughly 12% in after-hours trading following the announcement.
The company attributed the stronger guidance to surging demand for server processors that are being deployed in artificial-intelligence data centers. These chips are increasingly used by cloud providers as they move from model training to broader deployment of AI-driven services, a shift that has expanded the addressable market for central processing units.
Intel said first-quarter revenue was $13.58 billion, ahead of the $12.42 billion analysts had expected. Its data center and AI unit produced $5.1 billion in revenue, beating consensus estimates of $4.41 billion. Despite the top-line beats, Intel reported a GAAP loss of $0.73 per share in the quarter after taking more than $4 billion in restructuring charges. On an adjusted basis, the company earned $0.29 per share, outperforming the estimate of $0.01 per share.
Intel's turnaround plan has involved a combination of asset sales, workforce reductions and outside capital to strengthen its balance sheet and support investments in factory capacity. The company's CEO, Lip-Bu Tan, assembled financing and strategic agreements with the U.S. government, SoftBank and Nvidia to inject resources into Intel's manufacturing operations and to shore up investor confidence in the firm's long-term trajectory.
Finance chief Dave Zinsner emphasized an expanding role for CPUs in the AI stack. "The CPU (is) having a renaissance here," he said in an interview. His remark underscores Intel's view that CPUs are increasingly relevant for workloads that require reasoning and orchestration by autonomous AI agents - tasks that are often better suited to CPUs than to graphic processing units, which excel at large-scale numerical operations for model training.
Intel still faces operational challenges tied to execution at scale. The company’s ability to fully capitalize on the demand depends on delivering processors without production bottlenecks or supply disruptions, the company acknowledged.
One manufacturing milestone announced recently positions Intel to expand its presence in advanced chipmaking. The company secured Tesla as a customer for its next-generation 14A process at a planned Terafab production complex in Austin, Texas. In addition, Intel expanded its AI CPU collaboration with Alphabet’s Google and joined the Terafab project linked to SpaceX and Tesla to produce processors for robotics and data-center applications.
Investor sentiment toward Intel has shifted sharply this year. The stock has climbed more than 80% year-to-date and nearly 48% in April as market participants have placed larger bets on a renewed CPU opportunity for the company. Yet competition in the CPU arena remains intense, with rivals such as Nvidia, Advanced Micro Devices and Arm also pursuing products aimed at capturing AI-related workloads.
The company’s recent financials highlight the contrast between near-term operational costs and improving top-line momentum. While restructuring and other charges drove a GAAP loss in the quarter, adjusted profit metrics beat Street expectations, and management's outlook signals confidence in continued demand for its server CPUs.
Impacted sectors:
- Semiconductors - direct impact on manufacturers and foundries.
- Cloud services and data centers - demand drivers for AI server chips.
- Enterprise IT and robotics - potential customers for advanced processors.