Intel has forecast second-quarter revenue exceeding Wall Street expectations, signaling a surge in demand for its server chips crucial for AI data centers. Shares saw a significant jump following the announcement.
The company projects revenue between $13.8 billion and $14.8 billion, surpassing the estimated $13.07 billion. This growth is partly attributed to CEO Lip-Bu Tan's revival plan, which includes asset sales, layoffs, and strategic investments from entities like SoftBank and the U.S. government.
While Intel initially missed the early AI boom, new opportunities are emerging with advanced CPUs as cloud providers transition from AI model training to deployment. Finance chief Dave Zinsner noted the CPU's "renaissance," highlighting Intel's role in benefiting from AI investments.
CPUs are increasingly suited for AI agent workloads, complementing the GPUs used for large-scale training. However, Intel's ability to meet demand hinges on scalable, bottleneck-free manufacturing.
In a key development, Intel secured Tesla as its first major customer for its next-generation 14A process, aiming to produce chips at its advanced AI complex in Austin, Texas. The company also expanded its AI CPU partnership with Alphabet's Google and joined Musk's Terafab project.
First-quarter revenue reached $13.58 billion, beating estimates, with the data center and AI segment contributing $5.1 billion. Intel's stock has surged over 80% year-to-date, driven by investor confidence in its CPU technology, though competition remains intense from rivals like Nvidia and AMD.