Intel Q3 Preview: Can foundry bets and AI tailwinds drive a rebound?

Intel Company (NASDAQ: INTC) has reported muted outcomes for the primary half, because the chipmaker continues to navigate a difficult market surroundings. Regardless of the corporate actively executing its turnaround technique, intense competitors and capital constraints proceed to cloud its near-term outlook. Margins stay beneath stress as a result of working losses linked to Intel’s nascent foundry operations.

Q3 Knowledge on Faucet   

Market watchers see a blended efficiency within the third quarter – they predict an enchancment within the backside line in comparison with final 12 months, regardless of a decline in revenues. The consensus earnings estimate is $0.01 per share, excluding one-off objects, on revenues $13.12 billion. Within the prior-year quarter, the corporate generated $13.28 billion in revenues and incurred a lack of $0.46 per share. The Q3 report is anticipated to be out on Thursday, October 13, at 4:00 pm ET.

In early October, Intel’s inventory reached its highest worth in about one-and-half years, after making regular positive factors over the previous few weeks. INTC has grown round 28% previously 30 days, constantly buying and selling above its 12-month common value of $23.10 throughout that interval. The investor optimism primarily displays constructive developments like latest investments from the US authorities, Nvidia, and Softbank.

Q2 Loss

Within the second quarter, the tech agency’s income remained broadly unchanged at $12.9 billion as a decline in Consumer Computing income was offset by greater Knowledge Middle and AI revenues. It reported a lack of $0.10 per share for the June quarter, on an adjusted foundation, in comparison with earnings of $0.02 per share within the year-ago quarter. Revenues exceeded estimates, whereas the bottom-line missed. On a reported foundation, it was a web lack of $2.9 billion or $0.67 per share for Q2, in comparison with a lack of $1.6 billion or $0.38 per share final 12 months.

Lip-Bu Tan, Intel’s new CEO, stated within the Q2 earnings name, “As talked about in our Q1 earnings name, we have to right-size and cut back the corporate whereas guaranteeing that we’re retaining our greatest inside expertise and hiring the very best exterior abilities from business and universities. Throughout Q2, we accomplished the vast majority of the actions wanted to attain our year-end goal of seventy-five thousand staff. These have been onerous however obligatory selections, and we lowered administration layers by roughly fifty p.c within the course of.”

In Turnaround Mode

Intel is actively bolstering its liquidity by exterior investments and authorities assist, because it navigates mounting monetary pressures. Over time, heavy capital spending, strategic missteps and rising competitors have dealt a critical blow to the corporate’s monetary well being. On the AI entrance, it’s shifting to a software-led mannequin targeted on addressable segments like inference and agentic AI.

A couple of months in the past, the administration inked a $2-billion cope with SoftBank for investing in superior expertise. In the meantime, the corporate stated its Arizona fab is absolutely operational and is on monitor to begin high-volume manufacturing of Panther Lake, its first AI PC platform constructed on the superior 18A course of node. Lately, Intel introduced a partnership with Nvidia to co-develop a number of generations of customized knowledge middle and private pc merchandise.

Intel’s inventory was buying and selling up 3% on Monday afternoon, extending the uptrend seen in latest weeks. The worth has greater than doubled since early August.