Santa Clara: Intel reported its strongest quarterly revenue growth in 15 years, beating Wall Street expectations as surging demand for artificial intelligence (AI) infrastructure drove robust sales of its server processors.The US chipmaker posted adjusted earnings of 42 cents per share, far exceeding analysts' estimates of 21 cents per share. Quarterly revenue climbed 25% year-on-year to $16.1 billion, comfortably ahead of the consensus forecast of $14.42 billion. The better-than-expected performance, along with an optimistic forecast for the current quarter, lifted Intel shares more than 3% in after-hours trading. The stock has risen over 170% this year, extending a remarkable recovery driven by growing investor confidence in the company's AI strategy.Chief Executive Officer Lip-Bu Tan said the rapid expansion of AI workloads is creating sustained demand for Intel's computing platforms."AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise," Tan said.Intel has benefited from increasing adoption of CPUs alongside graphics processors in AI systems, with businesses recognising that CPUs are essential for efficiently managing AI agents and complex computing workloads.Looking ahead, Intel expects adjusted earnings of 38 cents per share on revenue between $15.8 billion and $16.8 billion in the current quarter, both above analysts' expectations.Chief Financial Officer David Zinsner said demand for Intel's server processors continues to outstrip the company's manufacturing capacity."Customers continue to signal a strong and sustainable spending environment," Zinsner said, adding that Intel is working to expand production to meet growing orders.The Client Computing Group, which makes PC processors, remained Intel's largest business, generating $8.9 billion in revenue, up 13% from a year earlier. However, the standout performer was the Data Center and AI division, where revenue jumped 59% to $6.3 billion, reflecting strong enterprise investment in AI infrastructure.Intel warned that global memory shortages could slow PC shipments in the coming months and expects revenue from its client computing business to remain largely unchanged in the next quarter.To support rising demand, the company plans to increase capital expenditure significantly, investing in new manufacturing facilities and expanding production capacity for both Intel-designed chips and contract manufacturing customers.Its foundry business posted 31% growth, generating $5.8 billion in quarterly revenue. Executives said Intel's latest 14A chip manufacturing process is progressing ahead of previous generations, strengthening its long-term manufacturing roadmap.However, Intel has yet to announce a major external customer for its most advanced manufacturing technology. The foundry business continues to rely primarily on internal production, with only a handful of external clients using older process technologies.