Intel shares jumped nearly 10% in Frankfurt and were up more than 8% in US pre-market trading on Friday after the chipmaker reported better-than-expected third-quarter results, marking its first profit after six consecutive quarters of losses.
The company’s return to profitability was driven by aggressive cost cuts and renewed investor confidence following recent multibillion-dollar investments.
Intel’s third-quarter revenue rose 3% year-on-year to $13.7 billion, surpassing analysts’ estimates of $13.2 billion tracked by FactSet.
The company reported net income of $4.1 billion, a stark turnaround from the $16.6 billion loss recorded a year earlier.
Adjusted earnings came in at 23 cents per share, well above the 2 cents forecast.
The results mark a key milestone for the Silicon Valley firm, which has been battling to regain its footing amid intense competition from Nvidia and AMD, along with manufacturing challenges that have eroded its dominance in the semiconductor industry.
Strategic investments from Nvidia, US gov bring a major boost
The latest results are the first since a series of high-profile investments by Nvidia, Japan’s SoftBank, and even the US government.
Nvidia announced in September that it would invest $5 billion in Intel, giving it about a 4% stake once new shares are issued.
SoftBank followed with a $2 billion investment in August.
In a surprise move, the US government also took a 10% stake worth $8.9 billion — a deal arranged after President Donald Trump publicly questioned CEO Lip-Bu Tan’s ties to China.
The intervention, while unprecedented, signalled Washington’s growing interest in securing domestic semiconductor capacity amid escalating competition with Beijing.
Following the announcement, Tan said Intel is “making steady progress in rebuilding the company” and focusing on efficiency and innovation.
“While we still have a long way to go, we are taking the right steps,” he told analysts during the earnings call.
Demand outpaces supply amid AI-driven growth
Intel said demand for its chips continues to exceed supply, particularly in data centers where operators are upgrading central processing units (CPUs) to support artificial intelligence (AI) workloads.
The company is now forecasting fourth-quarter revenue between $12.8 billion and $13.8 billion, slightly above market expectations.
Tan revealed that Intel has formed a new central engineering group to streamline its chip design and expand into custom chip development for external clients — an area where it will compete directly with Broadcom and Marvell Technologies.
Both companies are helping major tech players like Google and Amazon develop their own AI processors.
Finance chief Dave Zinsner cautioned, however, that Intel’s next-generation 18A manufacturing process still faces yield challenges and will not reach industry-standard levels until 2027.
How Intel CEO Lip-Bu Tan is overhauling its business strategy
Since taking over, Tan has overhauled Intel’s strategy, cutting more than 20% of the workforce and scaling back its manufacturing ambitions.
He also sold a 51% stake in Altera — Intel’s programmable chip unit acquired in 2015 for $16.7 billion — to private equity firm Silver Lake.
Tan’s capital strategy now leans on external funding and partnerships, a sharp contrast to his predecessor’s heavy spending approach.
These efforts, combined with the $15 billion in fresh funding from strategic investors, have helped shore up the company’s balance sheet.
Intel’s stock, which plunged nearly 60% last year, has rebounded strongly in 2025, rising almost 90% so far.
That recovery has allowed Intel to outperform Nvidia’s shares, a rare reversal in recent years.
“Intel has turned a corner and is steadying the ship,” said Ben Bajarin, CEO of Creative Strategies.
“It feels like a strong setup for 2026.”
Michael Schulman, chief investment officer at Running Point Capital, added that “shares popped after-hours based on better-than-feared guidance, visible cost progress, and AI-PC buzz.”
Analysts urge caution despite turnaround
Despite the optimism, analysts remain divided on whether Intel’s rebound can be sustained.
Bernstein maintained a “market perform” rating with a $35 price target, noting, “We understand the desire to claim victory for the embattled company, but this fight is far from over; perhaps it’s better to call it a draw for now.”
TD Cowen, which rates the stock a “hold” with a $38 target, said “a lot still needs to go right for fundamentals to catch up with the narrative.”
Morgan Stanley echoed that sentiment, maintaining an “equal weight” rating and emphasizing the need for proof of progress in Intel’s core CPU roadmap.
“We like some of the new directions, but our focus continues to be the core CPU business and the roadmap, where we are looking for proof points,” it said.
JP Morgan remains skeptical, keeping an “underweight” rating with a $30 price target, citing risks of further market-share losses and an unproven external foundry business.
For now, Intel’s long-awaited comeback has energized investors and industry watchers alike.
Whether this momentum marks a sustainable turnaround or a temporary reprieve will depend on the company’s ability to deliver on its promises in the quarters ahead.
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