Intel Corporation’s stock surged more than 12% in after-hours trading on Thursday following the release of its first-quarter 2026 earnings report, which far exceeded market expectations, driven by a booming demand for AI chips. The company reported revenue of $18.7 billion, a 19% year-on-year increase, and net income of $3.2 billion, up from $1.8 billion in the same period last year. The strong performance was largely attributed to its AI-focused business segment, which saw revenue grow by 47% year-on-year.

Intel’s CEO Pat Gelsinger highlighted that the company’s AI CPUs and data center chips have gained significant market share amid the global AI boom, as enterprises and cloud service providers scramble to upgrade their infrastructure to support AI applications. The company also provided an upbeat outlook for the full year, forecasting 27% annual growth in the AI and cloud markets, driven by continued demand for high-performance computing and generative AI technologies. Gelsinger noted that Intel’s ongoing turnaround strategy, which focuses on AI and advanced manufacturing, is finally paying off, positioning the company to compete more effectively with rivals like NVIDIA and AMD.

Analysts pointed out that Intel’s strong earnings signal a recovery in the semiconductor industry, which has been struggling with oversupply and weak demand in recent years. The AI-driven growth is expected to continue in the coming quarters, as more industries adopt AI technologies. However, they also warned that Intel still faces challenges in catching up with NVIDIA in the high-end AI chip market.