Intel reported earnings that exceeded expectations, signaling successful pivot toward AI demand.

Intel reported strong quarterly results that signaled a potential recovery for the US chip maker. The company achieved revenue of $13.6 billion, representing a 7 percent increase from the same quarter a year earlier, though it logged a $3.7 billion loss that was less than the market had anticipated. The company forecast revenue in the current quarter would range from $13.8 billion to $14.8 billion, and shares soared more than 19 percent in after-market trades following the earnings announcement.

Intel's newfound momentum is being driven by the rise of AI "agents" that independently tend to computer tasks. CEO Lip-Bu Tan explained that "the next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic," and that "this shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings." Unlike foundational AI models that require cutting-edge GPUs in datacenters, these agents generate more work for local networks using the kinds of processing units Intel manufactures. Emarketer analyst Jacob Bourne noted that "Intel delivered the kind of report that the bulls needed to justify a stock that's soared over the past year, with data center momentum and foundry progress both pointing in the right direction," and that "these results make Intel's turnaround look less like a hope-fueled blip and more like a steadier longer-term trajectory."

Intel's recovery comes after years of strategic missteps that had undermined its market position. The company largely missed the smartphone boom and failed to develop competitive hardware for the AI era, allowing Asian manufacturers TSMC and Samsung to dominate the custom semiconductor market. Most notably, Intel was blindsided by Nvidia's rise as the world's leading AI chip provider, as Nvidia's graphics processing units—originally designed for gaming consoles—became essential building blocks for artificial intelligence systems. However, the company now has significant backing: Nvidia announced a $5 billion investment in Intel, Japanese investment giant SoftBank provided support, and President Donald Trump's administration took a 10 percent equity stake, recognizing the strategic importance of the once-dominant chipmaker.

Tan, who took over as Intel CEO a year ago amid layoffs and market challenges, has emphasized the dramatic shift in the company's prospects. "A year ago, the conversation about Intel was about whether we could survive," he said. "Today is about how quickly we can add manufacturing capacity and scale our supply to meet enormous demand for our products." This sentiment is reinforced by a major new initiative: Intel has joined Elon Musk's companies in a project called Terafab, a manufacturing facility based near Austin, Texas, which will aim to produce one terawatt of computing power per year—slightly less than the total power generation capacity of the United States. The facility will be jointly run by Musk's electric-vehicle firm Tesla and his rocket company SpaceX and will have capabilities to design, manufacture, test and improve each chip. Tan stated that "Elon and I share a strong conviction that global semiconductor supply is not keeping pace with a rapid acceleration in demand."