What Intel just delivered
Intel topped profit expectations even as it struck a cautious tone. Adjusted earnings landed at 52 cents per share for the third quarter, ahead of the 40 cents analysts anticipated, with revenue of $16.51 billion effectively in line with the $16.5 billion forecast.
Sales rose 21% from $13.7 billion a year ago. Under the hood, performance split: the client computing and physical AI unit declined 5% year over year to $8.1 billion and missed estimates, while the data center and AI business surged 78% to $7.3 billion.
One headwind sits outside Intel's walls. Counterpoint Research reported global PC shipments were down 4% year over year in the second quarter because memory and other components got much more expensive.
The guidance that rattled investors
For the current quarter, management projected adjusted earnings of 25 cents a share and revenue in a range of $15 billion to $16 billion. By comparison, LSEG's survey showed expectations of $17.1 billion in sales and 43 cents of adjusted EPS. The weaker outlook sent the stock lower in late trading.
"We see the PC slowdown continuing at least through the first half of next year, but we remain optimistic about the opportunities across our broader portfolio," finance chief David Zinsner said. "We will continue making disciplined investments in capacity and working capital to increase supply and support future growth."
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CPUs, agentic AI, and the foundry question
Intel is best known for central processing units, and the rise of agentic AI has given CPUs fresh relevance. While chatbots and large models rely a lot on GPUs from Nvidia and Advanced Micro Devices, apps like Meta's Muse and OpenAI's Dots use CPUs to coordinate tasks and data in cloud environments. "Despite near term headwinds affecting the broader PC industry, we continue to see robust demand for CPUs and more broadly, for all our computing platforms in the long term," CEO Lip-Bu Tan said.
As the sole U.S. producer of cutting-edge logic processors, Intel has begun mass production of its 18A node at a newly built Arizona facility, positioning itself as a rival option to Taiwan Semiconductor Manufacturing Co. Intel is still the primary user of that chip, though analysts say a large fabless customer could opt for Intel's next node, 14A. "People want a second source to be able to twist TSMC's arm and keep them honest on pricing," said TechInsights analyst Dan Hutcheson. "All the big ones have been testing there."
Money, milestones, and the buildout timeline
Intel completed a $23 billion stock sale in August. Following setbacks on its 7- and 10-nanometer nodes, the Trump administration last year acquired a 10% ownership position in Intel, with Nvidia and Softbank also committing billions to the company during the same period. Compared with former CEO Pat Gelsinger - who launched an aggressive effort to rejuvenate the unit - Tan is approaching foundry spending with greater caution.
On construction, crews installed the first structural truss at Intel's massive Ohio fab last week, a site originally slated to deliver chips in 2025. A separate Arizona plant is expected to be up and running before 2029, with operations targeted for the end of 2028. This week, Oracle expanded its agreement with Intel, stating it plans to deploy the company's next-generation Xeon server chips in tandem with the newest rack-scale offerings supplied by Nvidia and AMD while it continues expanding its data center footprint.
Nvidia, now the most valuable company thanks to GPU dominance, reports in mid November. AMD reports next week. Big Tech has poured trillions into AI and the infrastructure to run it in recent years.
The bottom line for your portfolio
Intel's quarter showed profit and revenue outperformance, but the near term is constrained by a slow PC market and a lighter Q4 guide. Longer term, Intel is building 18A at scale, advancing new fabs, and courting big customers for future nodes while it balances foundry investment under Tan. Watch how guidance evolves, how PC demand stabilizes, and whether a marquee fabless win materializes - those are the levers likely to move the stock from here.
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