Intel Shares Jump After Strong Q1 Results and Optimistic Q2 Outlook
Intel shares surged in after-hours trading after the company reported stronger-than-expected first quarter earnings and issued a much better outlook for the second quarter.
The company expects second quarter revenue to come in between $13.8 billion and $14.8 billion, well above Wall Street expectations of around $13.03 billion.
For the first quarter, Intel reported adjusted earnings per share of $0.29 on revenue of $13.6 billion. Analysts had expected earnings of just $0.01 per share on revenue of $12.36 billion.
A year earlier, Intel posted earnings per share of $0.13 and revenue of $12.67 billion.
Intel’s CEO said the next stage of artificial intelligence is moving closer to the end user, shifting from large foundational models to inference and AI agents. This trend is increasing demand for Intel’s CPUs, advanced packaging, and manufacturing capabilities.
The company’s Data Center and AI division generated $5.1 billion in revenue, beating expectations of $4.41 billion.
Intel initially missed much of the first AI chip boom, which was dominated by GPUs. However, the rise of AI agents is creating new demand for CPUs, since many agent-based tasks, such as browsing websites, searching files, or working with spreadsheets, rely heavily on central processors.
Intel also said demand is currently stronger than supply, though it plans to increase supply each quarter.
The company’s Client Computing business, which includes PC chip sales, generated $7.7 billion in revenue, above expectations of $7.1 billion. However, Intel is still facing pressure from the broader memory chip shortage, which is weighing on PC sales.
During the quarter, Intel also announced major strategic deals. The company said it will work with Elon Musk on a planned Terafab facility, which is expected to produce chips for SpaceX, xAI, and Tesla.
Intel also entered a multiyear agreement with Google, where its Xeon CPUs will support AI, inference, and other workloads for Google Cloud.
Separately, Intel announced plans to repurchase a 49% stake in a fabrication facility it had previously sold to Apollo in 2024.
These moves have helped fuel investor confidence in Intel’s turnaround strategy, with the stock rising strongly year to date.
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