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Intel delivered a surprisingly strong revenue forecast for the current period, driven by a surge in data center spending.
Intel's sales in its data center segment increased by 59% in the last quarter.
Intel's data center revenue beat expectations by $700 million.
NVIDIA generates up to $20 billion in revenue from selling CPUs as part of its integrated systems.
NVIDIA has already surpassed Intel in the CPU market when considering CPUs sold as part of an integrated system.
The larger market opportunity is in AI data centers, not traditional data centers.
The five largest hyperscalers are projected to collectively spend $1 trillion on CapEx by 2027, based on consensus estimates.
Large language model developers face a significant risk that governments may regulate them due to their market power, which could limit profitability.
Intel has raised its CapEx guidance for the current year to approximately $20 billion, up from a previous forecast of $18 billion.
Intel's data center sales growth of 59% was more than double the pace of the company's overall revenue growth.
Google's recent earnings results also indicated strong demand in the data center market.
The sustainability of Intel's current demand is uncertain due to competition from Nvidia, Google, and AMD, who are all now making CPUs.