Intel forecasts upbeat quarterly revenue, profit on strong AI-driven server chip demand

Intel CEO Lip-Bu Tan has been leading a turnaround at Santa Clara, California-based Intel, which fell behind as Nvidia's graphics processors dominated the first phase of the AI boom. A key part of Intel's revival strategy is its contract manufacturing, or foundry business. The unit secured Elon Musk's Tesla as a customer for its next-generation **14A** process for the "Terafab" AI chip project, bolstering confidence in Intel's efforts to land major buyers. Expectations of another high-profile win rose in April after U.S. President Donald Trump announced that Apple had agreed to make processors with Intel. Neither company has confirmed the deal. Nvidia, which dominates the AI accelerator market, is also making a rare move into the CPU space with its "Vera" processor, while Big Tech firms such as Amazon and Alphabet continue to develop their own in-house, Arm-based CPUs. Intel said it expects third-quarter revenue between **$15.8 billion** and **$16.8 billion**, above analysts' average estimate of **$15.10 billion**, according to data compiled by LSEG. Adjusted profit is expected to be **38 cents per share**, compared with analyst estimates of **27 cents**. The company said it is benefitting from a boom in what is known as agentic AI, where autonomous agents carry out tasks such as computer coding on behalf of human users. For the second quarter ended June 27, Intel said sales rose **25.4%** to **$16.13 billion** and adjusted profit was **42 cents per share**, compared with estimates of **$14.42 billion** and **21 cents per share**. Adjusted gross margin came in at **41.8%**, compared with estimates of **38.8%**. Intel's shares have declined more than **25%** from a record close on June 22 amid a broader selloff in chip stocks, though shares remain up more than **170%** for the year. In an interview, Chief Financial Officer David Zinsner told Reuters that booming demand has prompted Intel to raise its capital expenditure forecast for this year from **$18 billion to $20 billion**. Zinsner also said Intel expects capital expenditures to be "up meaningfully next year" as well. "That's signaling the confidence around the growth opportunities for the business," Zinsner said. He also said that Intel has signed a range of long-term agreements with customers for data center CPUs and specialized chips called XPUs. He said the agreements range from three to five years and that some contain both chip volume and price commitments and some contain only volume commitments. But Zinsner also said Intel would remain disciplined about spending. "You can't completely hang your hat on (long-term agreements) because when things change, a lot of times things get renegotiated," he said. However, "they're not signing those unless they have real confidence around what they're going to invest." He added: "It gives us a pretty good confidence around what we should be planning in terms of output." Zinsner said Intel has about **$30 billion** in cash and a **$10 billion** line of credit but that a share sale, while currently not authorized, is not out of the question. "I wouldn't miss the possibility that we would do that. But no specific plans at this point," he said.

Intel forecasts upbeat quarterly revenue, profit on strong AI-driven server chip demand

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