Intel (INTC) stock surged as much as 7% after the chipmaker reported third-quarter earnings and revenue that soundly topped Wall Street expectations, signaling a significant turnaround.
The troubled chipmaker posted $13.7 billion in revenue, beating the $13.15 billion analyst consensus, and delivered an adjusted $0.23 earnings per share (EPS), dramatically exceeding the projected $0.01.
AI Fuels a Turnaround
CEO Lip-Bu Tan credited the momentum to the surging demand for Artificial Intelligence, stating, “AI is accelerating demand for compute and creating attractive opportunities across our portfolio.” Intel’s traditional CPUs are essential components, working alongside AI chips in data centers and powering next-generation AI PCs.
The company’s positive results follow a wave of high-profile strategic moves, including major investments from the U.S. government (9.9% stake), Nvidia ($5 billion), and SoftBank. These investments have significantly boosted Intel’s balance sheet and investor confidence in the new leadership.
Foundry Business Shows Improvement
The company’s closely watched, struggling manufacturing arm, Intel Foundry Services (IFS), is showing early signs of recovery. While IFS posted an operating loss of $2.3 billion, the figure is a significant improvement from the massive $5.8 billion loss reported in the previous year.
All eyes remain on the foundry business, as it represents Intel’s crucial path back to industry leadership and its geopolitical significance as the only large-scale, U.S.-based advanced semiconductor manufacturer.
The Path Forward: 14A is the New Focus
Intel is shifting its manufacturing focus for outside customers. Initial efforts to attract customers with its most advanced 18A chip production process (reportedly tested by Nvidia and Broadcom) have not yet materialized into major deals.
Instead, the company is now prioritizing the use of 18A for its own internal products and is focusing on its next-generation process, 14A, to attract outside foundry customers. Intel’s head of investor relations, John Pitzer, noted the strong early reception for the new node: “where we are today on 14A is absolutely ahead of where we [were] at a similar point in time in the 18A development.”
Q3 Intel Highlights
- Revenue: $13.7 Billion (Beat consensus of $13.15 Billion)
- Adjusted EPS: $0.23 (Beat consensus of $0.01)
- Foundry Loss: $2.3 Billion (Improved from $5.8 Billion loss last year)
- Key Drivers: Improved PC chip sales and accelerating AI demand.
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