Intel posted bumper financial results on Thursday, a sign that the long-suffering chipmaker is finally reaping significant benefits from the artificial intelligence boom.
First-quarter revenue rose 7 percent to $13.6 billion, the Silicon Valley company said, more than $1 billion more than Wall Street had expected. Intel’s projection for sales in the current quarter also significantly beat previous estimates.
Intel shares, which have risen more than 80 percent this year after early signs of a turnaround, jumped nearly 20 percent to more than $79 a share after the announcement.
“These results make Intel’s turnaround look less like hope and more like a more stable longer-term trajectory,” said Jacob Bourne, an analyst at eMarketer, in notes issued after the announcement.
The company reported a loss of $3.7 million, compared with a loss of $800,000 a year earlier, reflecting heavy investment to increase its production.
The rapid rise in Intel’s stock price has substantially multiplied the value of the investment the Trump administration made in the company last summer. In August, Lip-Bu Tan, a venture capitalist who became Intel’s CEO last year, negotiated a deal in which the government acquired about 10 percent of Intel’s stock for $8.9 billion. That stake is now worth nearly $35 billion.
Intel, known for microprocessor chips that handle general computing, has largely stayed away as artificial intelligence has taken off. More specialized chips from rival Nvidia have reaped most of the heavy spending on new equipment and data centers to power the technology. But Intel chips are playing a broader role in a class of AI workloads known as inference that is starting to dominate investment.
Revenue at Intel’s data center group jumped to $5.1 billion, up 22 percent from a year earlier, the company said Thursday. The group’s revenue had previously grown more slowly as the company said it was struggling to supply enough chips to meet customer demand.
Demand still outstrips the company’s chip supply, Mr. Tan said on a conference call with analysts. But Intel has made progress ramping up production and expects to do even better, he said.
The company works “to meet customer needs,” he said. “That’s our top priority.
For years, Intel has struggled to make chips profitably for others, both in what’s known as its foundry and also by making products designed by its own engineers.
But there are signs that Intel’s foundry business is starting to get some conversions as the market leader, Taiwan Semiconductor Manufacturing Company, struggles to absorb a flood of orders for AI chips. Tesla CEO Elon Musk said this week that the electric car maker plans to use Intel’s most advanced manufacturing process to meet some of its growing need for chips.
Foundry revenue rose 16 percent to $5.4 billion, Intel said Thursday. The company’s personal computer chip business, its largest by revenue, rose just 1 percent to $7.7 billion. This business has been hurt by rising memory chip prices.
