Intel NASDAQ:INTC rose 3.26% premarket after reporting second-quarter revenue of $16.1 billion, up 25% and its fastest growth in more than 15 years, against the $14.42 billion analysts expected. Adjusted earnings of $0.42 a share doubled the $0.21 forecast. On a GAAP basis Intel lost $2.16 a share. The main difference between the GAAP and adjusted figures was a $2.45 per share mark-to-market loss on escrowed shares. Adjusted free cash flow came in at negative $8.4 billion.
Data center drove it. Revenue in the Data Center and AI segment rose 59% to $6.3 billion, while client computing, still the larger unit, grew 13% to $8.9 billion and foundry sales rose 31% to $5.8 billion. Non-GAAP gross margin recovered to 42% from 30% a year earlier. CEO Lip-Bu Tan said AI is driving "unprecedented demand for compute."
Guidance came in ahead as well. Intel forecast third-quarter revenue of $15.8 billion to $16.8 billion and adjusted EPS of $0.38, against consensus of $15.1 billion and $0.27. The company said it has signed 10 long-term agreements, some locking in pricing and others volume. CFO David Zinsner said Intel is supply constrained with data center demand exceeding what it can produce.