Achieve the strongest growth rate in 15 years! Intel's Q 2 results and guidance both explode, CPU demand is booming

Achieve the strongest growth rate in 15 years! Intel's Q 2 results and guidance both explode, CPU demand is booming.

After the market closed on Thursday, Eastern Time, Intel released a second-quarter financial report that exceeded expectations. Not only did its revenue increase year-on-year, the fastest since 2011, but it also raised its performance guidance, exceeding market expectations.

In after-hours trading, its stock price once soared by nearly 10%, but as of press time, the increase had narrowed to about 4%.

The financial report shows a comparison of Intel's second quarter (as of June) with LSEG's consensus forecast: Earnings per share (EPS): Adjusted 42 cents, above expectations of 21 cents Revenue: US$16.1 billion, higher than the expected US$14.42 billion; a year-on-year increase of 25%, the fastest growth rate in the same period in the past 15 years.

Gross profit margin also recovered to 42%, much higher than the 2.5% in the same period last year. The company said this was due to revenue growth brought about by economies of scale and the sale of high-margin, high-priced chips. For the third quarter, Intel expects adjusted earnings per share of 38 cents on revenue between $15.8 billion and $16.8 billion.

Analysts had expected revenue of $15.1 billion and earnings per share of 27 cents, according to LSEG data. AI drives computing demand soaring As of Thursday's close, Intel's stock price has risen more than 170% so far this year and soared 84% last year. However, Intel's stock price has retreated recently, falling 28% in July.

Despite the recent decline in its stock price, Intel is benefiting from the boom in artificial intelligence infrastructure, which has boosted sales of its server processors and has become the core driver of Intel's performance. "Artificial intelligence is driving computing demand to unprecedented levels," Intel CEO Steve Chen said in a statement.

"As we continue to advance execution, Intel is well-positioned to achieve sustainable growth in its CPU business." Intel also said it is starting to sign long-term agreements with customers for server CPUs, with some agreements locking in prices. The practice is becoming increasingly common in the global chip industry - especially in memory.

More and more suppliers are trying to maintain the current high pricing and market dominance amid the booming artificial intelligence market. Intel said it has reached 10 long-term agreements.

Chief Financial Officer David Zinsner said the company is currently facing supply constraints, with demand from data center customers exceeding its production capacity. "Customers continue to signal a strong and sustainable spending environment," Zinsner said on an earnings call with analysts.

Intel said it expects third-quarter PC sales to be flat due to memory shortages. OEM business grows strongly In terms of foundry business, Intel is increasing capital expenditures, plans to achieve "significant growth" next year, and actively transform into a manufacturer that produces chips for other companies.

"I do want to give investors at least an expectation that this number (capital spending) is going to go up," Zinsner said on the earnings call, noting that much of the spending will be on factory tooling.

Zinsner said that the company's latest manufacturing process is called 14A, and its technical level has surpassed the level of early technologies in the same cycle. Intel said its foundry plants reported sales of $5.8 billion, a year-on-year increase of 31%. Nonetheless, Intel did not reveal its foundry's major customers.

Intel's foundries signed Fortinet as their first confirmed customer earlier this week, but are now using older manufacturing techniques to produce security chips. Dongcai Illustration·Add some useful information

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