Data center strength and upbeat guidance signal growing momentum in the AI era
Shares of Intel (INTC) surged more than 16% in after-hours trading following a strong first-quarter earnings report that exceeded expectations on both revenue and profitability. The semiconductor giant also issued better-than-expected guidance for the second quarter, further boosting investor confidence.
Intel reported adjusted earnings per share of $0.29 on revenue of $13.6 billion, significantly beating Wall Street estimates of $0.01 EPS and $12.36 billion in revenue. The results marked a notable improvement from the same quarter last year, when the company posted $0.13 EPS on $12.67 billion in revenue. The upside was largely driven by strength in Intel’s Data Center and AI segment, which generated $5.1 billion in revenue—well above expectations of $4.41 billion.
Looking ahead, Intel expects second-quarter revenue between $13.8 billion and $14.8 billion, far surpassing analyst forecasts of $13.03 billion. The strong outlook reflects accelerating demand tied to artificial intelligence infrastructure, particularly as the industry shifts toward AI agents and inference-based workloads.
CEO Lip-Bu Tan emphasized that the next phase of AI will increasingly rely on CPUs, an area where Intel has a long-standing advantage. While GPUs from competitors remain dominant for training large AI models, CPUs are critical for running real-world applications such as data processing, web interactions, and enterprise workflows—making them essential for scaling AI adoption.
Despite the strong performance, Intel acknowledged ongoing supply constraints, particularly as demand continues to outpace production. Additionally, a broader memory chip shortage is weighing on the PC market, which is expected to decline in unit shipments this year.
Still, with six consecutive quarters of revenue beating expectations and growing traction in AI, Intel appears to be regaining momentum and carving out a meaningful role in the evolving semiconductor landscape.
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