The AI infrastructure buildout is so massive that it has brought a once-ailing Intel back from the dead.
The chipmaker recorded its fastest revenue growth in 15 years this past quarter, driven almost entirely, it seems, by rising chip demand from AI data centers. In the second quarter of 2026, Intel’s revenue was up 25% from the same time last year, with a 59% increase alone from its data center and AI business, according to the company’s earnings report.
Once America’s leading chip giant, Intel lost its crown to other chipmakers, particularly the GPU king Nvidia, and watched sales plunge. The situation got dire enough that the previous CEO, Pat Gelsinger, was pretty much ousted in December 2024; the new CEO, Lip-Bu Tan, took over in March 2025 with promises of a major comeback; and the Trump administration stepped in with a 10% stake in August. Trump and his administration have reportedly been crucial in facilitating deals between Intel and Silicon Valley AI giants like SpaceX, Apple and Nvidia, further securing Intel a place in AI hype.
Intel’s turnaround story has also coincided with a renaissance period of sorts for central processing units, aka CPUs. GPUs are traditionally associated with AI hype, but CPUs are more Intel’s playing field. As enthusiasm around agentic AI grew, CPUs have taken on a renewed role as they are largely considered well-suited for tasks that are at the core of agentic systems like inference workloads.
“Our data center-AI group delivered a solid quarter. Demand accelerated across cloud and enterprise as customers increasingly recognize the critical role that CPUs in general and x86 CPUs in particular play in the AI infrastructure,” Intel CEO Lip-Bu Tan said in the company’s earnings call on Thursday.
Memory crisis continues testing PCs
But even though the boom in its AI business seems to be serving it well, Intel’s main bread and butter is still the chips it makes for PCs. While revenue from the AI and data center business enjoyed a massive 59% rise, the client computing segment (recently renamed to client computing and physical AI group) had a 13% rise in revenue from the same time last year.
PC sales and prices have been battered in the past year due to an AI-driven memory chip crisis. Chipmakers have largely shifted focus to address the booming demand from the massive AI data center buildout, leaving high-bandwidth memory chip supply restricted for consumer electronics like PCs and smartphones. With demand still high and supply limited, prices have risen for consumers while sales have suffered. Worldwide PC shipments had their first decline in two years this year, according to International Data Corporation research from earlier this month. Global smartphone shipments have also hit a record low this year due to the same culprit.
Intel is expecting the memory shortage to continue hitting PC sales through at least the rest of the year, too.
“We expect PC consumption to be sub-seasonal in the second half of the year, and down low double digits percent for all of 2026, impacted by rising memory prices and constraints,” Intel CFO David Zinsner said in the earnings call.
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