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Intel's Blowout Earnings Report Lifts AMD, Arm Shares in After-Hours Trading
Summary
Intel Corp. reported second-quarter revenue and earnings that far surpassed Wall Street estimates, signaling robust demand for server chips and triggering a rally in the shares of competitors AMD and Arm.
Intel Corp. (NASDAQ: INTC) on Thursday reported second-quarter financial results that significantly beat analyst expectations, fueling a rally across the semiconductor sector in after-hours trading. The strong performance, driven by a surge in data-center demand, lifted shares of rivals Advanced Micro Devices (NASDAQ: AMD) and Arm Holdings (NASDAQ: ARM).
Intel's Blockbuster Quarter
Intel posted its fastest revenue growth in nearly 15 years, a sign of a strong turnaround for the chipmaker. The results created a positive halo effect for the industry ahead of other key earnings reports.
- Q2 Revenue: $16.13 billion, crushing the Wall Street consensus of $14.33 billion.
- Q2 Adjusted EPS: $0.42, double the consensus estimate of $0.21.
- Q3 Guidance: The company guided for third-quarter revenue between $15.8 billion and $16.8 billion, well above the $15.1 billion analysts had projected.
Following the release, Intel's stock surged approximately 9.5% in after-hours trade to around $109.76 after closing the regular session down 2.46%.
Data Center Demand Fuels Rally
AdThe strong results were underpinned by a 13% year-over-year increase in Intel's Client Computing Group revenue to $8.9 billion. However, the broader market driver appears to be a supply crunch in server CPUs, according to Investing.com.
Reuters reported Thursday, citing sources familiar with the matter, that both Intel and AMD are securing longer-term commitments from Chinese data-center clients amid surging prices. This intense demand suggests a robust environment for all major server chip suppliers. Intel CEO Lip-Bu Tan had previously noted in April that demand, particularly for Xeon server CPUs, was running ahead of supply.
Spotlight Shifts to Competitors
Intel's strong quarter raises expectations for its competitors. In after-hours trading, AMD shares gained roughly 2.9%, while Arm Holdings rose about 4.3%. The report may help stabilize the Philadelphia Semiconductor Index, which had fallen about 20% from its June record high.
Investors will now turn their attention to upcoming results from Intel's peers to see if the trend holds. Arm is scheduled to report on July 29, followed by AMD on August 4. Intel's performance sets a high bar, especially for AMD's critical data-center segment.
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