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Intel shares surged more than 25% in early Friday trading after the chipmaker beat Wall Street’s Q1 forecasts and issued stronger-than-expected Q2 revenue guidance, helped by data center demand.
Intel reported adjusted earnings per share of $0.29 on revenue of $13.6 billion for the first quarter. Analysts expected EPS of $0.01 and revenue of $12.36 billion, according to Bloomberg consensus data.
The results marked a sharp improvement from the same quarter last year. Intel posted EPS of $0.13 and revenue of $12.67 billion in that period.
For the second quarter, Intel projected revenue between $13.8 billion and $14.8 billion. Wall Street had expected $13.03 billion, giving investors another reason to reprice the stock.
Intel’s Data Center and AI business generated $5.1 billion in revenue. Analysts had expected $4.41 billion, making the segment a key driver of the earnings beat.
The company said demand continued to exceed supply. Still, Intel plans to increase supply each quarter as customers seek more computing capacity.
Chief executive Lip-Bu Tan said the next wave of AI will move intelligence closer to users. He pointed to inference and agentic AI as major areas of rising demand.
Intel missed the early AI boom because it lacked chips that could train large AI models. Yet the company now sees a different opening as AI agents gain traction.
AI models still rely mainly on GPUs and similar chips from companies such as Amazon and Google. Those chips handle heavy model workloads in data centers.
At the same time, AI agents perform tasks such as browsing websites and searching spreadsheets. Those activities depend more on CPUs, giving Intel a fresh source of demand.
Intel also sees strength in advanced packaging. That process connects individual chip dies into larger systems and has become a key bottleneck in AI chip production.
Intel remains one of only three global companies offering the most advanced packaging. This position may support its guidance as AI infrastructure demand rises.
During Tesla’s first-quarter earnings call, Elon Musk said Tesla plans to use Intel’s upcoming 14A process at its Terafab facility. The chips would support Tesla vehicles, robots, and future SpaceX orbital data centers.
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Tan said he and Musk share the view that global semiconductor supply has not kept pace with demand. He said they are exploring unconventional ways to improve manufacturing efficiency.
Intel’s manufacturing push began under former CEO Pat Gelsinger in 2021. The company later replaced him with Tan after Gelsinger left in 2024.
Intel cut 15% of its workforce in July and canceled fab projects in Germany and Poland. Its Ohio chip plant also faces delays until 2030.
Intel’s Q1 earnings beat, stronger Q2 guidance, and $5.1 billion Data Center and AI revenue lifted investor confidence. The sharp stock rally reflects renewed attention on CPUs, advanced packaging, and AI infrastructure demand. Still, supply constraints and delayed fab projects remain key areas to watch.
