Intel reported a striking 25% rise in revenue for Q2 2026, hitting $16.1 billion compared to $12.9 billion during the same quarter last year. This marks the company’s best growth performance in more than 15 years, driven mainly by surging demand in its AI and data center divisions.
The Data Center and AI segment was the powerhouse, expanding 59% year-over-year to $6.3 billion, while the Client Computing division contributed $8.9 billion, up 13% from last year. Gross margins also improved considerably: GAAP gross margin jumped by 12.9 percentage points to 40.4%, supported by better factory yields and quicker production cycles, according to CFO Dave Zinsner.
However, despite these gains, Intel still registered a net loss on a GAAP basis due to one-time expenses. CEO Lip-Bu Tan highlighted that the AI-related surge in demand is fueling the company’s recovery. Since his appointment in early 2025, Intel has focused on upgrading its foundry capabilities, including developing the Intel 18A process technology as a part of a broader modernization effort.
Looking Ahead
For Q3 2026, Intel projects revenues between $15.8 billion and $16.8 billion, with non-GAAP earnings per share expected around $0.38, beating analyst estimates. The shares initially rose following the earnings report but saw some retracement amid overall market activity.
Investors will keenly monitor whether the improved gross margins sustain in the coming quarters. The margin boost indicates that operational improvements are real and could signal a durable turnaround if margins hold or increase. Should margins shrink, the strong Q2 performance may prove to be a temporary spike rather than a lasting shift.
