‘Our core message is simple: Strong demand for our products continues to outpace our growing supply. Our design manufacturing execution is improving, and operating discipline we put in place 15 months ago is beginning to show tangible results. Today, we are seeing the strongest revenue growth in more than 15 years,’ says Intel CEO Lip-Bu Tan.
Intel CEO Lip-Bu Tan used his company’s second fiscal quarter 2026 financial conference call to tell analysts the chipmaker is improving execution, manufacturing and operations as it looks to capitalize on demand for x86 processors, AI infrastructure, advanced packaging and foundry services.
During his prepared remarks, Tan said Intel beat guidance for revenue, gross margin and earnings per share, marking the seventh consecutive quarter of exceeding financial expectations.
“Our core message is simple: Atrong demand for our products continues to outpace our growing supply,” he said. “Our design manufacturing execution is improving, and operating discipline we put in place 15 months ago is beginning to show tangible results. Today, we are seeing the strongest revenue growth in more than 15 years.”
[Related: Intel Confirms Data Center Group Layoffs Ahead Of Q2 Results]
The results reflect internal changes designed to make Intel faster and more customer-focused, including better design and manufacturing execution, tighter operating discipline and closer customer engagement, Tan said. For instance, he said Intel’s expanded Google Cloud collaboration is part of a broader push to run the company with an AI-first mentality throughout its operations.
Tan said the AI buildout is creating openings across Intel’s product and foundry businesses at a time when the industry is constrained on leading-edge logic, wafers, memory and substrates.
“Intel is well positioned to benefit from this strong, sustained demand with three strategically important assets: our X86 CPU franchise, our advanced packaging technology and our vast wafer foundry network,” he said. “As AI expands from training to inference, and increasingly to agentic and multi-agent systems, general-purpose server CPU density continues to increase, and our core server CPU franchise is growing faster than ever.”
For partners, customers and OEMs looking for alternatives in a constrained semiconductor market, Tan positioned Intel Foundry as central to the company’s comeback effort. Intel 7, Intel 3 and Intel 18A factories beat internal volume targets on better yields, faster cycle times and more wafer starts, he said.
Intel 18A output increased during the quarter, with yields running ahead of expectations as Intel ramps several products on the node, Tan said.
“We are now ramping multiple new products on 18A while supporting growing demand for our lead products, including Panther Lake and Wildcat Lake,” he said. “I keep raising the bar on the internal targets, and the team continues to meet the challenge.”
Tan said Intel 14A is progressing, with defect density and transistor performance ahead of where 18A was at the same stage.
“We continue to build out and validate the IT portfolio for 14A as we position the 14A family for broad-based adoptions across a wide range of customers,” he said. “I’m pleased to see the increasing momentum on customer engagements for Intel 14A, and I’m increasingly confident that 14A will be a highly competitive process offering across key vectors of performance, power, density, cost and schedule.”
Intel’s Data Center AI Group delivered a solid quarter as customers increasingly focus on the role of x86 CPUs in AI infrastructure, Tan said. The second quarter’s year-over-year server processor growth was the strongest on record, while Xeon 6 remains one of the fastest-ramping products in Intel’s history, he said.
Intel CFO and Executive Vice President David Zinsner in his prepared remarks said that Intel’s Data Center AI Group launched Xeon 6+, code-named Clearwater Forest, the company’s first server-class product on 18A. The team also announced rack-scale and disaggregated inference innovations with partners Sambanova and Foxconn, Zinsner said.
“In addition, DCAI further enhanced our connectivity offerings by introducing new controller and adapter products supporting data center, enterprise and telco applications,” he said.
Intel’s design services business is also emerging as an opportunity, with revenue nearly tripling year over year, Tan said. Intel can combine its x86 franchise, IP, design capabilities, wafer manufacturing and advanced packaging to develop purpose-built AI-era networking, compute and accelerator products, he said.
Tan said Intel’s priorities are to strengthen its x86 product leadership and establish Intel Foundry as a world-class wafer and packaging foundry business.
“Our strategy is clear, and the pace of execution is accelerating,” he said. “Opportunities in front of us are substantial. Our strategy is showing earlier results, and I’m confident that Intel is well positioned to help define the next era of computing.”
Working With Intel: Nor-Tech
Dominic Daninger, vice president of engineering at Nor-Tech, a Minneapolis-based custom system builder focused primarily on servers for high-performance computing, told CRN that while Intel rival AMD has recently been giving Intel a good dose of healthy competition, it’s good to see Intel regaining its competitive edge.
“We don’t want just one dominant vendor out there,” Daninger said. “Competition breeds health on both sides. That’s the way we look at it. Both companies have been good partners over the years. We use some of each.”
Daninger said he has not seen much lessening of component shortages from Intel. However, he said, Nor-Tech is still seeing fairly healthy lead times of six to eight weeks, sometimes a little worse.
“If Intel cuts those lead times, it would help us respond faster to customer acquisitions,” he said. “A lot of what we run into is pretty high-end as far as the dollars involved. If we can forecast ahead, that helps because very few people spend $100,000 to $200,000 to maybe $500,000 without quite a lead time.”
Intel By The Numbers
For its second fiscal quarter 2026, which ended June 27, Intel reported total revenue of $16.13 billion, up 25.4 percent over the $12.86 billion the company reported for its second fiscal quarter 2025.
This included Intel Client Computing and Physical AI Group revenue of $8.9 billion, up 13 percent over last year; Data Center and AI Group revenue of $6.3 billion, up 59 percent; Intel Foundry revenue of $5.8 billion, up 31 percent; and other revenue of $700 million, down 33 percent. That revenue was partially offset with intersegment eliminations of $5.5 billion.
Total revenue beat analyst expectations by $1.65 billion, according to Seeking Alpha.
Intel also reported a GAAP net loss for the quarter of $11.03 billion, or $2.16 per share, which was significantly higher than last year’s loss of $2.92 billion, or 67 cents per share. On a non-GAAP basis, the company reported net income of $2.20 billion, or 42 cents per share, significantly better than last year’s net loss of $441 million, or 10 cents per share.
Non-GAAP net income beat analyst expectations by 20 cents per share, according to Seeking Alpha.
Looking ahead, Intel expects third fiscal quarter 2026 revenue of between $15.8 billion and $16.8 billion, up significantly from the $13.7 billion the company reported for its third fiscal quarter 2025.
The company also said it expects to report GAAP third-quarter 2026 earnings of 31 cents per share and non-GAAP earnings of 38 cents per share. That compares with last year’s GAAP earnings of 90 cents per share and non-GAAP earnings of 23 cents per share.
