Intel Q2 jump highlights AI and foundry push

Intel (INTC) delivered second-quarter revenue of $16.1 billion, a 25% increase from the prior year, reflecting a broad-based recovery across key businesses. Adjusted earnings came in at $0.42 per share, underscoring improved profitability as volumes recovered. The results marked a notable rebound and were accompanied by rising investor interest in the company’s strategy.

The share price responded sharply, climbing roughly 10.8% (about $9.86) to close near $100.86 following the release. With approximately 5.04 billion shares outstanding, the stock move lifted Intel’s (INTC) market capitalization into the roughly $509–510 billion range. The reaction highlighted how the market is weighing faster growth against ongoing investment needs.

Growth in the Data Center and AI segment was a key highlight, with revenue rising 59% year over year to $6.3 billion in the second quarter. This performance reflected stronger demand for server and AI-related products and positioned the segment as a central contributor to Intel’s overall expansion.

Client Computing and Physical AI revenue reached $8.9 billion in the quarter, providing another major pillar of the company’s top line. Together, the client and data center businesses accounted for the majority of Intel’s revenue and illustrated how both PC-related demand and AI workloads are supporting the recovery.

Intel’s foundry business recorded revenue of roughly $5.8 billion in the second quarter, an increase of about 31% year over year. Despite that growth, only $293 million of foundry revenue, or about 5%, came from external customers, indicating that most activity still relates to internal production.

The foundry segment posted an operating loss of about $2.1 billion in the quarter, though this represented a narrowing from earlier periods. The figures show that while the foundry strategy is beginning to scale in revenue terms, it has not yet reached profitability and remains reliant on future gains in external customer volume.

Management raised 2026 capital spending guidance to about $20 billion, up from $18 billion, and indicated that investment in 2027 is expected to increase meaningfully as well. The higher capex plans align with ongoing efforts to build manufacturing capacity, including for the foundry business and advanced process technologies.

Intel ended the quarter with about $29.7 billion in cash and investments and approximately $50.5 billion of debt on its balance sheet. Operating cash flow for the first half of the year improved to about $8.1 billion, helping support the elevated capital spending program even as the company continues to work toward making its foundry operations profitable.