US Stock Market: Intel’s AI bet drives upbeat forecast and investor confidence

Intel projected second-quarter revenue above Wall Street expectations, signaling strong demand for its server processors used in artificial intelligence workloads across data centers, according to Reuters. The upbeat forecast reflects renewed momentum for the chipmaker as it attempts to regain ground in the rapidly evolving AI sector.

The company expects revenue to be between $13.8 billion and $14.8 billion, surpassing analysts’ estimates of $13.07 billion, based on LSEG data. Intel also issued adjusted earnings guidance of 20 cents per share for the quarter, significantly higher than expectations of 9 cents. Following the announcement, Intel’s shares surged 19% in extended trading, adding roughly $64 billion to its market value and extending a strong rebound this year, Reuters reported.

The improved outlook comes as CEO Lip-Bu Tan pushes a turnaround strategy aimed at stabilizing Intel’s finances and restoring its competitive position. The plan includes asset sales, job cuts, and efforts to secure strategic investments and partnerships. Intel has also benefited from agreements involving the U.S. government, SoftBank, and Nvidia, which are expected to support its manufacturing ambitions and long-term growth.


Although Intel lagged competitors during the early stages of the AI boom, the company is now targeting opportunities in advanced central processing units. As cloud providers increasingly shift from training AI models to deploying them, CPUs are becoming more relevant for handling workloads tied to autonomous AI systems and reasoning-based applications.

Tan indicated that customer demand is already reflecting this shift, reinforcing Intel’s confidence in its product pipeline. The company has also raised chip prices to offset rising production costs, contributing to its stronger revenue outlook. However, its ability to meet demand will depend on maintaining large-scale manufacturing capacity without supply disruptions.

In a notable development for its foundry business, Intel secured Tesla as a major customer for its next-generation 14A chipmaking process, part of Elon Musk’s Terafab project in Texas. While financial details remain undisclosed, the partnership marks a significant step in Intel’s effort to expand its contract manufacturing operations.

Industry observers note that Intel’s long-term strategy remains high-risk, hinging on its ability to transform into a competitive foundry player capable of challenging established leaders. Success in capturing demand from emerging technologies such as robotics and agentic AI could significantly reshape its valuation over time, Reuters reported.

Intel’s foundry division generated $5.4 billion in first-quarter revenue, though the majority came from internal business, with less than $200 million attributed to external customers. The company’s custom chip segment is expected to exceed $1 billion in revenue this year.

First-quarter results also exceeded expectations, with total revenue reaching $13.58 billion compared to estimates of $12.42 billion. Data center and AI segment revenue came in at $5.1 billion, ahead of projections of $4.41 billion. The company reported a loss per share of 73 cents due to restructuring charges exceeding $4 billion, but posted adjusted earnings of 29 cents per share, well above expectations, Reuters said.

Despite the positive momentum, Intel continues to face intense competition from other semiconductor firms seeking to capitalize on the growing AI market.