Intel (NASDAQ:INTC) Signals A Stronger AI Comeback

KUALA LUMPUR, 29 JULY 2026 —

Intel Corp. said quarterly revenue beat expectations as artificial-intelligence demand lifted data-centre sales 18%, sending shares up 8.3% in after-hours trade.

Revenue rose 11% year-on-year to USD100.2 billion, while adjusted earnings per share climbed 22% to USD1.45, both topping the top end of management’s guidance and consensus estimates, the company told investors. Server-related revenue jumped 18% on strength in AI accelerators and high-performance processors.

“Demand across key computing markets is stabilizing after an extended period of uneven conditions,” said Pat Gelsinger, Intel’s chief executive, in a statement. He cited tighter cost control and improved factory efficiency as contributors to the performance.

For the current quarter, Intel forecast revenue growth in the mid-single digits sequentially, defying analyst expectations of a modest decline. The company also raised its full-year adjusted earnings guidance by about 5%, attributing the move to stronger AI infrastructure spending and easing inventory corrections in enterprise segments.

AI remains the centrepiece of Intel’s strategy. It estimates data-centre AI workloads will expand at a 40% compound annual rate through 2030, driving demand for its Gaudi accelerators, Xeon processors, and networking silicon. Orders from cloud providers and hyperscalers climbed 25% in the quarter, while enterprise refresh cycles began to revive after two years of deferred spending.

Intel’s foundry business posted 12% year-on-year revenue growth to USD1.8 billion, but operating losses widened to USD450 million as ramp-up costs rose. The unit is investing USD20 billion in a new 18A (1.8 nm-class) fab in Arizona and USD10 billion in a packaging plant in Malaysia as part of a USD100 billion global manufacturing push.

“Foundry execution is the bottleneck,” Gelsinger said. “We’re targeting break-even within 18 months, but yields and customer adoption will determine how quickly we get there.”

Bernstein analysts said Intel’s progress in advanced packaging and transistor technology could help it close the gap with TSMC and Samsung. “If yields improve and external customers sign multi-year contracts, the foundry unit could contribute meaningfully to free cash flow by 2027,” Bernstein wrote.

Risks remain. Global PC shipments are sluggish and memory prices are under pressure. AMD is gaining share in AI accelerators, while Nvidia dominates high-end data-centre silicon. Gelsinger warned that disciplined execution across product, manufacturing, and customer relationships is essential.

For Malaysia, the stakes are in assembly and test. Intel’s RM9 billion facility in Kulim, Kedah, employs 5,000 workers and handles advanced packaging for AI chips. A sustained upturn in server demand would support utilisation rates and local employment, according to sources familiar with the plant.

Intel plans to launch its next-generation Arrow Lake processors for PCs in late 2026 and Granite Rapids for servers in early 2027. It expects its 18A node to enter volume production by the second half of 2027, a milestone that could determine whether it regains technology leadership.

Market watchers will focus on gross margins, which rose 2 percentage points to 48%, and free cash flow, which turned positive at USD1.2 billion. “The question is no longer whether Intel can recover, but how fast and how sustainably,” said an analyst at UBS.

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