Intel lifts Q3 revenue forecast, raises 2026 capital spending to $20 billion from $18 billion on AI demand
Computer motherboard and Intel chip appear in this illustration taken August 25, 2025. REUTERS
Intel shares rose 6% in premarket trading on Friday after the chipmaker issued a stronger-than-expected revenue forecast, signalling that the artificial intelligence boom is accelerating its long-awaited turnaround.
The company projected third-quarter revenue above Wall Street estimates and increased its 2026 capital expenditure forecast to $20 billion from $18 billion.
Intel said growing adoption of its data centre central processing units (CPUs) by customers building AI infrastructure is improving its outlook. Chief Executive Lip-Bu Tan is seeking to position the company as a broader beneficiary of AI-driven semiconductor demand, despite Nvidia’s dominance in AI accelerator chips.
“The capex increase not only signals confidence in cash flow upside and demand visibility from long-term agreements for products, but also confidence that Foundry customers are coming (for packaging and 14A wafers),” analysts at Melius Research said.
Although a recent sell-off in global semiconductor stocks has pulled Intel back from record highs, its shares have more than doubled this year on optimism over the company’s turnaround strategy.
The earnings report prompted at least six brokerages to raise their price targets. The median analyst target now stands about 8.8% above Intel’s previous closing price, according to LSEG data.
Tan has spent the past year strengthening Intel’s finances and securing support from the US government and major investors as the company aims to play a central role in efforts to expand domestic semiconductor manufacturing.
“The aggressive capex raise is a proof point that Intel is likely to see continued customer acquisition as the United States demands more domestic semiconductor manufacturing,” analysts at D A Davidson said.
Demand for data centre CPUs has surged alongside the rapid adoption of AI agents, with Intel executives previously saying customer orders were exceeding the company’s production capacity.
