Intel Struggles to Meet High Demand but Sees Strong Growth and Margin Recovery
At Splunk’s .conf26 conference, Intel CEO Lip-Bu Tan revealed that the company is currently meeting only about 50% of customer demand due to a surge in orders. This shortage stems from increased demand for CPUs used in AI inference tasks rather than just GPUs like those produced by Nvidia. Despite this supply challenge, which might seem problematic at first glance, it reflects strong growth and improved financial performance for Intel. The company's data center and AI segment saw 59% revenue growth to $6.3 billion in Q2 2026 alone. Gross margins have also recovered significantly from below 30% a year ago to over 41%, with further improvement expected. Intel is investing heavily in new manufacturing capacity, including the upcoming 14A process set for early 2027. However, supply constraints may persist into next year as production ramps up gradually.
