Intel's NASDAQ:INTC latest regulatory filing suggests its data centre business is benefiting from sharply higher server prices and stronger gross margins, according to Wells Fargo.
The chipmaker's Data Center and AI revenue rose 59% year over year in the second quarter, driven mainly by server growth. Xeon CPU shipments increased 9%, while average selling prices jumped 48% as Intel sold a richer mix of premium processors and implemented some demand-based pricing.
The filing also showed $951 million in other data centre revenue, up from $304 million a year earlier. Intel separately said its ASIC revenue nearly tripled year over year and rose 20% from the previous quarter.
Wells Fargo analyst Aaron Rakers estimated the unit generated a 56% gross margin, about 840 basis points better than in the first quarter. Data centre operating income reached $1.84 billion, helped by roughly $1.7 billion in higher profits tied largely to server revenue.