Intel Posts Fastest Revenue Growth Since 2011, Then Shares Fall 8% Anyway

Best Quarter in 15 Years, Worst Reaction in Months

Intel reported second-quarter revenue of $16.1 billion Thursday, up 25% year over year. That is the fastest quarterly growth rate the company has posted since 2011, according to CNBC. Adjusted earnings came in at 42 cents per share, nearly double the 21-to-27-cent consensus estimates tracked by LSEG and cited across CNBC, Business Insider and IBTimes.

The stock jumped as much as 12% in after-hours trading Thursday, according to the Motley Fool. By Friday afternoon, that gain had evaporated. Shares fell more than 6% during Friday's session, according to IBTimes, and were trading around $92.20, down from Thursday's $100.23 close, per the Motley Fool.

The same earnings report that beat every major estimate got sold off the next day. That is how markets often work when a stock has run hard beforehand.

Where the Growth Actually Came From

The engine was Intel's data center and AI unit, where revenue jumped 59% year over year to $6.3 billion, up sharply from 22% growth in the first quarter, according to the Motley Fool. CEO Lip-Bu Tan credited the broader AI infrastructure boom: "AI is driving demand for compute," he said in the earnings release, adding that Intel is "well-positioned to capture sustainable growth across our CPU franchise."

Client computing, Intel's PC chip business and still its largest by revenue, grew 13% to $8.9 billion. The foundry unit, which manufactures chips for outside customers, grew 31% to $5.8 billion, according to CNBC.

CFO David Zinsner told analysts Intel is now supply constrained, meaning demand from data center customers is outstripping what the company can produce. "Customers continue to signal a strong and sustainable spending environment," Zinsner said on the earnings call. Intel has signed 10 long-term agreements with customers, some locking in pricing, others locking in volume, a strategy that's becoming standard practice across the memory and chip sector as suppliers try to lock in gains before any AI-spending pullback, per CNBC.

Profitability improved just as sharply. Adjusted gross margin hit 41.8%, up 12.1 percentage points from a year ago. Adjusted operating margin swung from negative 3.9% to positive 17.2%, according to the Motley Fool. Operating cash flow came in at $7 billion for the quarter.

The $11 Billion Net Loss Nobody Should Panic About

Intel reported an $11 billion net loss for the quarter. That is real, and it is in the filing. But it is not a cash loss from running the business.

The Motley Fool reported the loss reflects a $12.5 billion non-cash, mark-to-market accounting charge tied to shares Intel holds in escrow under its CHIPS Act agreement with the U.S. government. That's an accounting valuation swing, not money going out the door. Adjusted net income for the quarter was a positive $2.2 billion. None of the four sources reviewed here flagged this distinction as controversial, but a headline "$11 billion loss" next to "best quarter in 15 years" looks contradictory unless you know what's driving it.

Why the Stock Fell Anyway

The most reasonable read is simple: Intel had already run up enormous gains before this report, and some investors used strong results as an exit opportunity. Shares are up over 170% for 2026 as of Thursday's close, according to CNBC, after an 84% gain in 2025, the year the U.S. government took roughly a 10% stake in the company as part of a push to shore up domestic chip manufacturing. Even after Friday's drop, Intel is still up sharply for the year. But the stock had also fallen about 28% just in July, according to CNBC, meaning the report landed in the middle of an already rocky month.

A company can beat every estimate and still see its shares sink if expectations built into the price were even higher, or if the run-up before the print was unsustainable. Nothing in these results suggests fraud or mismanagement. It's a valuation story, not a fundamentals story.

One genuine soft spot: Intel's foundry business, the one Tan is betting the company's future on, lost $2.1 billion in the quarter, according to eMarketer senior analyst Jacob Bourne, cited by Business Insider. Bourne called the foundry unit "a work in progress," noting it has "yet to land the major customers Intel's strategy depends on." That's a fair, specific criticism, not a dismissal of the quarter, but a reminder that Intel's turnaround still depends on convincing outside chipmakers to trust Intel with their manufacturing, something it hasn't done at scale yet.

The results also arrive days after Intel disclosed layoffs in its data center group as part of what the company called an efficiency push, per Business Insider. Intel expects flat PC sales in the third quarter due to industrywide memory shortages, according to CNBC. For the current quarter, Intel is guiding to revenue of $15.8 billion to $16.8 billion and adjusted EPS of 38 cents, both well above the 27-cent, $15.1 billion consensus. Whether that forecast holds, and whether foundry customers actually materialize, is the real test ahead.