Intel Corp. saw its stock rise nearly 4% in premarket trading on Friday after the chipmaker reported second-quarter results that exceeded Wall Street expectations. The gains came despite a sharp selloff in South Korean chip stocks, with the KOSPI declining 5.8% and Samsung and SK Hynix falling 7.6% and 8.3% respectively. Intel's second-quarter revenue increased 25% to $16.1 billion with adjusted earnings of $0.42 per share, surpassing analyst estimates of $14.5 billion in revenue and $0.22 per share profit. The South Korean market decline pressured the U.S. chip trade as the KOSPI is heavily weighted toward chipmakers Samsung and SK Hynix.
Intel Reports 25% Revenue Growth in Second Quarter
Intel's second-quarter revenue reached $16.1 billion, a 25% increase from the prior year, with adjusted earnings per share of $0.42. Wall Street analysts had anticipated $14.5 billion in revenue and an adjusted profit of $0.22 per share, according to Fiscal.ai. The revenue expansion was largely driven by Intel's data center operations, where sales soared 59% to $6.3 billion. CEO Lip-Bu Tan stated in a Bloomberg interview, "In data centers, the CPU is taking off. Demand is outpacing our increasing supply, and so those are good problems to have."
Intel's foundry business narrowed its operating loss to $2.1 billion from a $3.2 billion loss a year earlier. The unit recently secured customers including Apple and Tesla, though no new customer wins were announced in the report. Intel's third-quarter sales and profit forecasts came in above expectations. As of the last close, INTC shares had declined 29% from their peak on June 22 but remain 172% higher year to date.
Intel's shares had climbed as high as 12% in Thursday's after-market session immediately following the earnings report. The company plans to spend $20 billion this year, up from its previous forecast of $18 billion, and could tap the capital markets for funds.
South Korean Chip Stocks Drag on U.S. Semiconductor Trade
South Korea's KOSPI declined 5.8% by Friday afternoon in Seoul, with Samsung stocks sliding 7.6% and SK Hynix falling 8.3%. The move in U.S. semiconductor stocks has become increasingly bundled with KOSPI, which is heavily weighted toward chipmakers Samsung and SK Hynix and has seen increased volatility lately. The Direxion Daily South Korea Bull 3X Shares (KORU), a three-times leveraged ETF tracking South Korea's largest stocks, dropped 8.5%. The sentiment for the fund has dipped steadily over the past week and was 'bearish' as of the last reading.
Retail Traders and Analysts Assess Intel's Capex Plans
INTC was the top trending stock on Stocktwits early Friday, with retail sentiment moving to 'extremely bullish' from 'neutral' the previous day. Retail traders debated the company's capital expenditure plans and foundry business update. One trader wrote on Stocktwits, "INTC no way intel will stay at 100 and plus with that higher capex announcement wall street gonna dump on us," while another said, "$INTC can't hold a 9% gain for a few minutes, we're stuck here until 2027."
Analysts noted that Wall Street had largely expected a strong quarter, with much of the optimism already priced into the stock ahead of the earnings release. Deepwater Management founder Gene Munster said in an X post, "INTC says they won't ramp Capex unless they were confident in customer commitments. Since they're raising Capex 'significantly' next year, that means they're confident in those 10 long-term customers."
Based on Intel's fine print, Munster broadly believes that the AI infrastructure buildout is still in its early stages, with demand for its CPUs benefiting from the broader hyperscaler investment cycle. While he sees Intel as a beneficiary of the AI boom, he noted that much of Intel's recent optimism is already reflected in its valuation.
FAQ
What were Intel's second-quarter earnings results?
Intel reported second-quarter revenue of $16.1 billion, a 25% increase, with adjusted earnings per share of $0.42. This exceeded Wall Street analyst estimates of $14.5 billion in revenue and $0.22 per share profit. Data center sales drove the growth, increasing 59% to $6.3 billion.
Why did South Korean chip stocks affect Intel's premarket trading?
South Korea's KOSPI declined 5.8% on Friday, with Samsung falling 7.6% and SK Hynix dropping 8.3%. The move in U.S. semiconductor stocks has become increasingly bundled with KOSPI, which is heavily weighted toward chipmakers Samsung and SK Hynix, creating pressure on the U.S. chip trade despite Intel's positive earnings.
How much is Intel increasing its capital expenditure?
Intel plans to spend $20 billion this year, up from its previous forecast of $18 billion. The company could tap the capital markets for funds. Deepwater Management founder Gene Munster noted that Intel stated it would not ramp capex unless confident in customer commitments, suggesting confidence in its 10 long-term customers.
