Intel Surges as Government and Private Capital Fuel Turnaround
Intel (NASDAQ: INTC) posted third-quarter revenue of $13.65 billion, exceeding analyst expectations of $13.14 billion. Adjusted earnings came in at $0.23 per share, well above the $0.01 forecast by LSEG, though comparisons were complicated by an unusual accounting treatment for government funding. The results mark a significant shift from a year ago, when Intel reported a $16.6 billion loss.
Shares surged 6% in extended trading, adding to a nearly 90% rally so far in 2025.
U.S. Government, Nvidia, and SoftBank Capital Injections Prove Critical
This quarter marked Intel’s first earnings report since the U.S. government became its largest shareholder, acquiring a 10% stake in August through an $8.9 billion investment. Intel accounted for a $5.7 billion portion of that amount in Q3 results.
Additionally, Intel received $5 billion from Nvidia and $2 billion from SoftBank, giving it critical liquidity after several quarters of financial pressure. The Nvidia deal, which gives the AI chip leader a 4% stake, includes plans to integrate Intel CPUs with Nvidia GPUs — a strategic move that could help Intel regain competitiveness in AI and data center markets.
Foundry Ambitions Curtailed, Cost Cuts Drive Margins Higher
CEO Lip-Bu Tan’s aggressive cost-cutting efforts have significantly improved profitability. Gross margins hit 40%, beating the 35.7% consensus. Tan scaled back previous CEO Pat Gelsinger’s expansive foundry plans, which had contributed to Intel’s first annual loss since 1986.
While the foundry unit posted $4.2 billion in Q3 sales, all were internal, with no external clients secured yet. Still, the company noted it began production of its most advanced chips at its Arizona facility during the quarter.
PC Demand Recovery and Supply Constraints Support Core Business
Client Computing revenue, largely from PC chips, reached $8.5 billion — a 3% year-over-year increase. Management stated that demand outpaced supply, a trend it expects to continue into 2026.
Meanwhile, data center CPU sales slipped 1% to $4.1 billion. Intel is banking on its Nvidia partnership to revive growth in this segment.
Outlook Balanced, But Sentiment Remains Bullish
Intel guided Q4 revenue between $12.8 billion and $13.8 billion, with the midpoint slightly below analyst forecasts. Adjusted EPS is expected at $0.08, in line with estimates. While risks remain — including potential revisions tied to SEC accounting guidance — the market has responded positively. The stock, which closed at $38.16 on October 23, rose to $40.46 after the report.
Forecast: Bullish
Strong execution, high-profile strategic investments, and recovering PC demand are restoring investor confidence. With 2025 gains approaching 90% and key partnerships underway, the short-term outlook for Intel remains bullish.