Intel posted blowout financial results on Thursday, a sign that the long-suffering chip maker is finally reaping substantial benefits from the artificial intelligence boom.
Revenue in the first quarter rose 7 percent to $13.6 billion, the Silicon Valley company said, more than $1 billion higher than Wall Street expected. Intel’s projection for sales in the current quarter also beat prior estimates by a wide margin.
Intel’s stock, already up more than 80 percent this year on early signs of a turnaround, jumped nearly 20 percent after the announcement to more than $79 a share.
“These results make Intel’s turnaround look less like a hope-fueled blip and more like a steadier longer-term trajectory,” said Jacob Bourne, an analyst at eMarketer, in remarks issued after the announcement.
The company posted a loss of $3.7 million, compared with a loss of $800,000 a year earlier, reflecting heavy investments to ramp up its manufacturing.
The rapid rise in Intel’s share price has substantially multiplied the value of an investment that the Trump administration made in the company last summer. In August, Lip-Bu Tan, a venture capitalist who became Intel’s chief executive last year, negotiated a deal under which the government acquired about 10 percent of Intel’s shares for $8.9 billion. That stake is now worth nearly $35 billion.
Intel, known for microprocessor chips that handle general-purpose calculations, has largely remained on the sidelines as A.I. has taken off. More specialized chips from a rival, Nvidia, reaped the bulk of heavy-duty spending on new equipment and data centers to power the technology. But Intel’s chips are playing a wider role in a class of A.I. workloads known as inferencing, which is beginning to dominate investments.
Revenue in Intel’s data center group jumped to $5.1 billion, up 22 percent from a year earlier, the company said on Thursday. Revenue for that group previously rose more slowly as the company said it struggled to supply enough chips to meet customer demand.
Demand is still exceeding the company’s chip supplies, Mr. Tan said during a conference call with analysts. But Intel has made progress in boosting production and expects to do even better, he said.
The company is working “to meet customer needs,” he said. “That is our top priority.”
Intel has struggled for years to make chips profitably for others, in what is known as its foundry business, as well as manufacturing products designed by its own engineers.
But there are signs that Intel’s foundry business is starting to win a few converts, as the market leader, Taiwan Semiconductor Manufacturing Company, struggles to fill a flood of orders for A.I. chips. Elon Musk, Tesla’s chief executive, said this week that the electric car manufacturer planned to use Intel’s most advanced production process to fill some of its growing need for chips.
Revenue for the foundry business rose 16 percent to $5.4 billion, Intel said on Thursday. The company’s business selling chips for personal computers, its largest by revenue, grew just 1 percent to $7.7 billion. That business has been hurt by rising prices for memory chips.
