A 25% revenue jump and doubled EPS beat marks Intel's strongest growth in over 15 years
Intel reported Q2 2026 quarterly revenue of $16.1 billion on July 23, a 25% increase year-over-year from $12.9 billion in Q2 2025. That is the company’s strongest revenue growth in more than 15 years. Non-GAAP earnings per share came in at $0.42, against analyst expectations of approximately $0.21.
The AI segment did the heavy lifting #
The Data Center and AI segment grew 59% year-over-year to $6.3 billion. The Client Computing segment added $8.9 billion, up 13% from a year ago.
Gross margins came in at 40.4% on a GAAP basis, up 12.9 percentage points year-over-year. Non-GAAP gross margin reached 41.8%. CFO Dave Zinsner pointed to improved factory yields and faster cycle times as the explanation for that margin expansion.
GAAP results still showed a net loss, driven by one-time items.
What CEO Lip-Bu Tan is actually building #
CEO Lip-Bu Tan’s public messaging around the Q2 results emphasized AI-driven demand as the engine powering the recovery. Intel has been investing in building out external foundry capacity, including advancement of the Intel 18A process, as part of a broader foundry modernization effort begun when Tan took the helm in early 2025.
What investors should actually watch #
Intel’s Q3 2026 guidance came in at revenue between $15.8 billion and $16.8 billion, with non-GAAP EPS projected at $0.38, exceeding market consensus. The stock initially moved higher after the earnings release, then pulled back amid broader market movements.
Investors tracking Intel’s recovery should watch gross margin trajectory. The 12.9 percentage point improvement in GAAP gross margin is the most concrete evidence that the manufacturing fixes are real. If that margin holds or expands into Q3 and Q4, the operational turnaround thesis has legs. If it compresses, the Q2 numbers start to look more like a favorable quarter than a durable inflection point.
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