Intel CEO Lip-Bu Tan holds a wafer of CPU tiles for the Intel Core Ultra series 3, code-named Panther Lake, outside the Intel Ocotillo campus in Chandler, Arizona. Panther Lake is the first client system-on-chips (SoCs) built on the Intel 18A process node.
Intel delivered stronger-than-expected revenue in the third quarter, signaling renewed demand for its x86 processors. This report is the company’s first since the U.S. government became its top shareholder in August, acquiring a 10% stake. Investors responded positively, sending Intel shares up 6% in after-hours trading.
Revenue Exceeds Expectations
Intel reported third-quarter revenue of $13.65 billion, beating the $13.14 billion consensus estimate. Adjusted earnings per share came in at 23 cents. While not directly comparable to analysts’ expectations, these numbers indicate a clear rebound for the PC chipmaker.
The company recorded a per-share loss of 37 cents due to shares held in escrow for the U.S. government’s $8.9 billion investment. Under the deal negotiated during the Trump administration, 433.3 million shares were purchased at $20.47 each.
Net Income Returns to Profitability
Intel posted a net income of $4.1 billion, or 90 cents per share, in the third quarter. This contrasts sharply with a net loss of $16.6 billion during the same period last year. During the quarter, Intel also received $5.7 billion from the U.S. government as part of its investment.
The company cautioned that its accounting treatment of the government’s stake is unprecedented. While Intel consulted the Securities and Exchange Commission, the ongoing government shutdown has delayed final approval. The company warned that future revisions to results are possible.
CEO Emphasizes Strategic Partnership
On an earnings call, CEO Pat Gelsinger highlighted Intel’s commitment to the government’s semiconductor goals. “We are fully committed to advancing the Trump administration’s vision to restore semiconductor production and proudly welcome the U.S. government as an essential partner,” he said.
Collaboration with Nvidia Aims to Boost AI Chips
Intel also received a $5 billion investment from Nvidia in September. This collaboration will integrate Intel CPUs with Nvidia’s artificial intelligence GPUs, which currently dominate 90% of the AI chip market. Intel expects this partnership to enhance growth in its data center CPU segment, which has faced slight declines.
Product Sales and Demand Trends
The company’s products division generated $12.7 billion in sales, a 3% increase from last year. The Client Computing Group contributed $8.5 billion, covering chips for PCs and laptops. Data center CPU sales totaled $4.1 billion, down 1% year-over-year. Intel said chip demand continues to outpace supply, a trend likely to extend into next year.
Intel Foundry Focused on Growth
Investors are closely watching Intel Foundry, the division producing chips for other companies. Scaling the foundry requires $100 billion in capital investment, and it has yet to secure a major external client. Intel began production of its most advanced chips in Arizona during Q3.
The foundry reported $4.2 billion in revenue, down 2% annually, with all sales coming from Intel’s own chip production. Despite this, the division remains central to Intel’s long-term growth strategy.
Workforce Reductions Continue
Intel employed 88,400 people at the end of the quarter, down from 124,100 a year ago. The reduction aligns with broader restructuring and cost-cutting efforts across the company.
Outlook for Q4
For the fourth quarter, Intel projects revenue of $13.3 billion at the midpoint, with adjusted earnings of 8 cents per share. Analysts expected $13.37 billion and 8 cents per share. The outlook does not include the impact of Intel’s recent sale of its Altera subsidiary.
