Intel's stock surged 20% in after-hours trading on Thursday after the chipmaker posted first-quarter results that surpassed analyst expectations, signalling a successful pivot toward artificial intelligence hardware. The company reported revenue of $13.58 billion (€11.6 billion), beating the $12.3 billion (€10.5 billion) consensus estimate, while adjusted earnings per share came in at $0.29 against a forecast of just $0.01.
The strong performance was largely driven by Intel's Data Centre and AI (DCAI) division, which generated $5.05 billion (€4.2 billion) in revenue — a 22.4% increase year-on-year and well above the $4.41 billion (€3.77 billion) analysts had projected. The division's growth reflects growing adoption of Intel's Xeon 6 processors and Gaudi 3 AI accelerators among enterprise customers and cloud service providers.
AI Strategy Gains Traction
Intel CEO Lip-Bu Tan, who took the helm just over a year ago, said the company is benefiting from a shift in AI deployment. "The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic," Tan stated. "This shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings."
The company also issued a robust forecast for the second quarter, projecting revenue between $13.8 billion (€11.8 billion) and $14.8 billion (€12.6 billion), well above the $13 billion (€11.1 billion) investors had expected. This guidance suggests that Intel's restructuring efforts are beginning to yield sustainable results.
Recovery from the 2025 Crisis
These positive figures mark a dramatic turnaround for a company that faced an existential crisis in 2025. At that time, Intel reported multi-billion-dollar losses and struggled with inefficient manufacturing processes. To prevent a collapse that the Trump administration argued could threaten national security, the US government took a direct 9.9% equity stake in August 2025, investing $8.9 billion (€7.8 billion) at a share price of $20.47 (€18.01). Notably, $5.7 billion (€5 billion) of that investment came from grants already awarded to Intel but not yet disbursed.
As part of the restructuring deal, Intel scrapped high-profile factory projects in Germany and Poland, consolidating its operations to focus on US domestic production. The company also cut its global workforce by 25%, or roughly 25,000 employees, in a bid to simplify what management described as a "needlessly fragmented" factory footprint.
At the time of writing, Intel shares are trading at $81.3 (€71.5), representing a nearly 300% increase since the government's intervention. The earnings beat suggests that these drastic measures have stabilised the balance sheet and allowed Intel to reinvest in the high-margin AI market, where it had previously lagged behind competitors like Nvidia. For context, Nvidia recently replaced Intel in the Dow Jones Industrial Average, underscoring the shifting dynamics in the semiconductor industry.
For European readers, Intel's recovery has implications beyond the US. The company's decision to abandon factory projects in Germany and Poland was a blow to the EU's ambitions to boost domestic chip production under the European Chips Act. Meanwhile, European tech firms and cloud providers that rely on Intel's AI accelerators may benefit from a more stable supply chain. The broader AI hardware market remains a key area of competition, with Nvidia's Blackwell chip also drawing attention from European data centre operators.
Intel's turnaround is not without risks. The company still faces intense competition from AMD and Nvidia, and its reliance on US government support raises questions about long-term independence. However, for now, the chipmaker appears to have weathered its worst storm, offering a glimpse of a more focused and profitable future.
