Intel reported its earnings on Thursday after the bell and shares were up 5% in after-hours trading. Intel completely destroyed Wall Street’s expectations reporting an EPS of 42 cents and revenue of $16.1 billion, up 15%. Analysts expected 22 cents per share and $14.43 billion in revenue.
CEO Lip-Bu Tan expects Intel to post $15.8 billion to $16.8 billion in revenue with an EPS of 38 cents for the third quarter, well above analyst estimates.
Tan said that this Q2 report was the strongest revenue growth the company has seen in over 15 years because of strong demand for its AI chips.
“AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise, ASICs, advanced packaging and vast wafer foundry network,” Tan said in a release.
Intel continues to prove that it’s a major player in the AI space. These results reinforces confidence investors had in the company. Intel’s AI business grew over 70% and accounted for close to 70% of Intel’s revenue. CFO David Zinsner said the company is “meaningfully increasing” its investments in equipment and space to meet demand, which continues to outpace supply.
Intel said it now expects capital expenditures this year could exceed $20 billion, up from $18 billion previously.
Intel is maneuvering in the AI sector better than most companies and is in a better position as well. Intel is providing AI hyperscales with hardware, these hyperscalers are increasing their AI spending. Investors are skeptical about hyperscalers spending, not infrastructure spending. Intel is in the right place, at the right time.
