Intel forecast quarterly profit and revenue above Wall Street estimates, driven by a surge in demand for central processing units from the artificial intelligence data center buildout, according to Reuters reporting by Anhata Rooprai and Stephen Nellis. The company expects third-quarter revenue between $15.8 billion and $16.8 billion, outpacing the average analyst estimate of $15.1 billion compiled by LSEG. Adjusted profit is projected at 38 cents per share, topping the forecasted 27 cents.
Agentic AI Drives Data Center CPU Demand Surge
The financial lift stems from a boom in agentic AI, where autonomous agents execute tasks like computer coding for human users. According to Chief Financial Officer David Zinsner, the resulting demand for data center CPUs caught company leaders off guard earlier this year, pushing orders past manufacturing capacity. Consequently, Intel raised its capital expenditure forecast for the year from $18 billion to $20 billion, with spending slated to increase further next year.
Zinsner told Reuters that Intel has secured long-term agreements spanning three to five years with data center customers. Some contracts lock in both volume and price commitments, while others specify volume only. To support this infrastructure push, Intel reported holding about $30 billion in cash alongside a $10 billion line of credit, while keeping the door open to a potential future share sale though none is currently authorized.
Contract Manufacturing Gains Traction with Tesla Win
Intel’s foundry business posted second-quarter sales of $5.77 billion, beating analyst estimates of $5.55 billion. The contract manufacturing unit secured Elon Musk’s Tesla as a customer for its next-generation 14A process tied to the Terafab AI chip project. Bob O’Donnell, president and chief analyst at TECHnalysis Research, noted that securing these major engagements removes lingering questions that had placed a cloud of uncertainty over the foundry division since CEO Lip-Bu Tan took over.
Tan told analysts on a conference call that recent developments have made Intel fully committed to high-volume production using its 14A manufacturing technology in 2028. Last year, the company had warned it might drop the 14A process if it failed to attract a major customer. Chief market strategist Shay Boloor of Futurum Group noted that the stock’s future revaluation depends on converting data center shortages into sustained revenue growth and validating the manufacturing turnaround with external customers.
Did You Know?
Intel’s second-quarter sales rose 25.4% to $16.13 billion, with adjusted gross margins reaching 41.8%—both figures surpassing analyst expectations.
Frequently Asked Questions
What is driving Intel’s higher revenue forecast?
Intel points to a surge in demand for data and AI infrastructure driven by agentic AI, which has boosted orders for the company’s central processing units.
How much is Intel spending on capital expenditures?
According to CFO David Zinsner, Intel raised its capital expenditure forecast for the year to $20 billion, up from $18 billion, with further spending increases anticipated.
Which major customer signed with Intel’s foundry business?
Intel secured Elon Musk’s Tesla as a customer for its next-generation 14A manufacturing process.
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