Intel shares rally after chipmaker posts fastest growth in 15 years

Intel stock jumped more than 13 per cent on Thursday after the chipmaker reported its fastest revenue growth in 15 years as demand for its PC and AI data centre chips accelerated its financial turnaround.

Revenue rose to $16.1bn in the three months to the end of June, up 25 per cent year on year, and it forecast $15.8bn to $16.8bn for the current quarter, far exceeding Wall Street expectations.

The US group has rebounded from several difficult years after receiving backing from the Trump administration for its costly push to regain its status as America’s only world-class chipmaker.

On Thursday, Intel also upped its planned capital spending for this year from $18bn to $20bn and forecast higher spending into 2027, as it invests in new manufacturing equipment.Intel shares raced to all-time highs this spring after bumper earnings three months ago but have retreated around 25 per cent in the past month, alongside other chip stocks, as investors worry about the sustainability of the AI rally. The stock rallied in after hours trading.

“AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth” across both its chip design and manufacturing business, said Intel chief executive Lip-Bu Tan.

The company’s revenue growth for the June quarter was largely driven by demand and price adjustments for Intel-designed chips, with its product revenue hitting $15.1bn, well above estimates of $13.6bn.

Foundry revenue, relating to its critical manufacturing business, beat expectations at $5.8bn, up 31 per cent from a year ago.

Intel’s data centre and AI business revenue — which relates to the server chips used in the infrastructure that trains and runs AI models — was up 59 per cent to $6.3bn, above the $5.6bn analysts expected, according to Visible Alpha.

Adjusted net income rose to $2.2bn. Net income under the generally accepted accounting principles (GAAP) standard swung to an $11bn loss due to volati…