Intel reported its fastest revenue growth since 2011 as the company exceeded second-quarter expectations and issued optimistic future guidance.
Intel reported better-than-expected second-quarter results on Thursday, achieving its fastest revenue growth rate since 2011. The company's revenue grew by 25%, with the data center business seeing a 59% increase as artificial intelligence drives unprecedented demand for compute. CEO Lip-Bu Tan stated that the company is well-positioned to capture sustainable growth across its CPU franchise. The company outperformed analyst estimates by projecting adjusted earnings per share of 38 cents on revenue between $15.8 billion and $16.8 billion. To secure market power, Intel is establishing long-term agreements with customers to lock in pricing and chip volume. CFO David Zinsner noted that the company is currently supply-constrained as data center customers demand more than current production allows. Intel is also increasing capital expenditures to transition into a manufacturer of chips for other companies. While the foundry reported $5.8 billion in sales, the company continues to primarily manufacture its own chips. Gross margins recovered to 42%, bolstered by benefits of scale and higher-margin pricing.