Intel beats Q4 earnings expectations on strong AI data center growth; Habana/Ponte Vecchio GPU ramp validating Xeon acceleration strategy.

Intel beat quarterly expectations as AI infrastructure spending boosted demand for its data center processors and foundry business, signaling broader growth beyond GPUs. Intel's latest earnings suggest the AI infrastructure boom is finally paying off for more than just GPU makers.

The majority of growth came from the Data Center and AI segment, which reported a 59% year-over-year increase to $6.2 billion in revenue. Intel's Foundry business also saw a notable 30% increase, though it still primarily manufactures Intel's own product divisions. Intel was not part of the original component surge when Nvidia and others surged in value as GPUs and AI accelerators were hoarded by data center operators and AI companies. But as component supply across the entire data center stack became strained in 2026, Intel and other component suppliers further down the importance hierarchy began to see serious uplift.

As one of the main suppliers of CPUs, Intel could see sustained revenue increases as more data centers come online. Amazon, Apple, and other companies have custom Arm-based CPUs built by TSMC, but data centers operated by neoclouds and vendors without custom chips will need to source from Intel. Data center spending has nearly doubled in two years, with Gartner's worldwide IT spending forecast estimating $653 billion in data center spend in 2026, compared to $333 billion in 2024.

Intel's total revenue reached $16.1 billion, an increase of 25%, with a forecast of $15.8 billion to $16.8 billion for the next period—well ahead of the average investor expectation of $15.1 billion. The company recently became the first chipmaker to add ASML's High-NA EUV technology to its foundries, used to produce Intel's Panther Lake chips, which it is now offering to customers.

Apple is reportedly in discussions with Intel about moving some chip manufacturing to Intel facilities in the US, partly driven by the Trump Administration's push to return production of critical components to the United States and by Apple's desire to reduce reliance on TSMC, which primarily operates in Taiwan. Nvidia has made a similar bet on Intel, investing $5 billion with the potential to access its foundry business. AWS, Microsoft, and the US Department of Defense have been confirmed as customers of Intel's foundry business, while Tesla, Broadcom, and Nvidia are in the testing and evaluation phase.

Intel still trails TSMC in contract manufacturing and Nvidia in AI hardware, but its latest results suggest the AI infrastructure buildout is becoming a rising tide for the broader semiconductor industry. If cloud providers and enterprise customers continue expanding data center capacity, Intel could benefit not only as a CPU supplier but increasingly as a domestic manufacturing partner.