Intel’s comeback gets real after earnings beat

Key points:

The chipmaker’s best results in years show genuine progress in its turnaround, with investors cheering stronger PC and AI demand.

After years of promises, setbacks and strategic resets, Intel has finally produced a set of numbers that suggest its long-awaited turnaround is taking shape. The latest quarterly results delivered not just a headline beat but something more valuable: a sign that the internal repairs are beginning to show in the financials.

The key results:

• Revenue: USD 13.7 billion (above expectations of around USD 13.2 billion)
• Earnings per share: USD 0.23 (vs forecast of USD 0.01)
• Gross margin: about 40%, exceeding guidance
• Operating expenses: lower year-on-year and within target range

For a company that has spent years battling delays, cost overruns and market share losses, this was a welcome change. The key takeaway is not the size of the beat but the shift in tone. For the first time in years, Intel’s execution appears to be catching up with its ambitions.

Demand is back and supply is the problem

Intel’s fourth-quarter guidance looked soft at first glance, but the details matter. The numbers exclude around USD 400–500 million in revenue from the deconsolidation of its Altera business. Adjusted for that, the outlook aligns with expectations.

More importantly, demand is no longer the issue. The company reported strong appetite for new PCs driven by Windows 11 upgrades and early adoption of “AI PCs” with local inference capabilities. Data-centre demand is also strong, with AI workloads driving a surge in CPU orders.

Intel’s challenge now is delivering enough chips. Supply constraints on its 10- and 7-nanometre nodes are likely to cap revenue growth in the near term. It is a better problem to have than the reverse.

Margins are holding up despite heavy investment

Gross margin headwinds remain as Intel ramps up production of its 18A, 4 and 3 nodes. Operating expenses have fallen meaningfully over the past year, and foundry loading in Arizona should help offset the impact of the Altera exit next year.

Intel also strengthened its balance sheet by more than USD 20 billion through investments and asset sales, giving it flexibility to fund expansion without taking on excessive debt.

The foundry division, still loss-making, reported quarterly revenue of about USD 4.2 billion with a narrower deficit. Progress is slow but visible, and management sounded more confident about the roadmap and external interest.

The AI opportunity: inference first

Artificial intelligence remains at the heart of the semiconductor story, and Intel’s strategy is becoming clearer. Rather than chasing Nvidia in training GPUs, Intel is focusing on CPU-led inference, custom silicon and orchestration. Its partnership with Nvidia on connecting x86 processors with NVLink could open new hybrid computing opportunities, giving Intel exposure to AI growth without overpromising.

AI-ready PC chips designed to run lightweight inference tasks locally could also become a meaningful volume driver as laptop refresh cycles accelerate. Intel’s AI strategy is less about hype and more about embedding intelligence where people actually use it: in PCs and data centres.

Foundry progress is slow but steady

The foundry turnaround remains central to Intel’s recovery. The 18A node, branded Panther Lake, is due to launch by year-end, with yields improving. The next-generation 14A process is on track, and Intel maintains it can regain process leadership by 2026.

That goal is ambitious. The foundry business posted a quarterly loss of around USD 2.3 billion and will take years to reach scale. But early signs of external customer interest and the Altera spin-off should help attract new clients and clarify the business model.

For investors, the foundry operation is both a major risk and a major potential reward. Success would diversify revenue and restore Intel’s credibility as a manufacturing powerhouse.

Execution is everything

This quarter shows that Intel’s strategy is finally delivering tangible results, but execution remains the key variable. Supply constraints need to ease without hurting margins, AI demand must turn into real unit growth, and the foundry must prove its commercial viability.

The stock rose more than 7% on the day of the release and is up close to 90% year-to-date. That reflects growing confidence but also higher expectations. Intel has moved from the penalty box to probation. The turnaround is visible, but it will take several more strong quarters before it can be called complete.

What to watch next

For investors, the coming months will reveal whether Intel’s momentum can turn into durable profitability. Key milestones include:

• Margins: Will gross margin stabilise before recovering as new nodes mature?
• Supply relief: Are component shortages peaking early next year?
• AI traction: Are customers adopting Intel’s AI PC chips and accelerators?
• Foundry contracts: Do new clients sign up for 18A and advanced packaging services?
• Balance sheet discipline: Can Intel sustain its leaner cost base?

The long road back to leadership

Intel’s comeback is also a test of America’s semiconductor ambitions. Billions in government funding and private capital have been poured into rebuilding domestic chip capacity. Intel sits at the centre of that effort, and the stakes are high for both shareholders and national technology leadership.

The quarter shows that progress is real, but it is still early days. The company has stopped digging; now it needs to climb. The turnaround is no longer just a plan on a slide deck. It is visible, measurable and underway – but Intel’s real test begins now.

Sources: Intel Q3 2025 results, Bloomberg. Data as of 24 October 2025.