Intel shares surged 20% in after-hours trading following a quarterly report showcasing a successful pivot to AI-driven hardware. The company surpassed analyst predictions for both revenue and earnings. Revenue reached $13.58 billion, a 7.2% year-on-year increase, with adjusted earnings per share at $0.29, significantly exceeding the $0.01 estimate.
The company's strategy to integrate AI capabilities is showing results, particularly in its Data Centre and AI (DCAI) division. This segment generated $5.05 billion in revenue, a 22.4% increase from the previous year and above analyst projections. Intel's Xeon 6 processors and Gaudi 3 AI accelerators are gaining traction with enterprise and cloud clients.
CEO Lip-Bu Tan stated that the "next wave of AI will bring intelligence closer to the end user," increasing demand for Intel's CPUs and advanced packaging. The company issued a strong second-quarter forecast, projecting revenue between $13.8 billion and $14.8 billion, well above expectations.
These positive results follow a turbulent period for Intel. In 2025, the company faced significant losses and manufacturing challenges. The US government intervened, taking a 9.9% equity stake in August 2025 with an $8.9 billion investment. This led to a consolidation of operations and a focus on US domestic production. Currently, Intel shares are trading around $81.3, a nearly 300% increase since the government's stake. The company also underwent a significant downsizing, cutting its workforce by 25,000 employees. These measures appear to have stabilized the balance sheet and enabled reinvestment in the high-margin AI market.