Intel (INTC) reported its third-quarter earnings on Thursday, Oct. 23. The beaten-down chip maker brought in a new CEO, Lip-Bu Tan, earlier in the year to help it regain lost ground in a market now dominated by Nvidia (NVDA), Advanced Micro Devices (AMD), and Taiwan Semi (TSM).
It seems the turnaround is starting to pay off. Intel’s shares have soared 101.9% year-to-date, compared to the S&P 500 Index ($SPX) gain of 14.6%.
Let’s dig into the quarterly results to see where Intel stands today and whether 2026 could be a rebound year for the company.
As Intel navigates the AI-driven computing era, Q3 numbers indicated not only a recovery, but also increased momentum in both its core and expanding businesses. In the third quarter, revenue of $13.7 billion beat Wall Street’s forecast by $515 million. Revenue also increased by 3% year-over-year and 6% sequentially. The growth was fueled by strong customer demand, efficient inventory management, and improved supply chain dynamics.
Intel’s Data Center and AI Group (DCAI) reported $4.1 billion in revenue, up 5% sequentially, driven by demand for AI servers, storage, compute, and host CPUs. Management is “cautiously optimistic” about continued CPU growth into 2026. The expanding AI infrastructure build-out is prompting some data center operators to look at long-term strategic supply arrangements that can support sustained CPU demand.
Intel Foundry generated $4.2 billion in revenue, down 4% sequentially, but performance exceeded expectations for Intel 10 and Intel 7 nodes. The long-term outlook for Intel Foundry remains highly positive. CFO David Zinsner emphasized forecasts of a tenfold rise in AI data center capacity (measured in gigawatts) by 2030, resulting in significant demand for wafers and packaging services. As one of the few companies with leading-edge manufacturing capabilities on U.S. soil, Intel is uniquely positioned to capitalize on this surge.
One of the most significant developments in the quarter was Intel’s growing cooperation with Nvidia. The two businesses are collaborating to integrate Intel’s x86 processors with Nvidia’s NVLink technology. The Client Computing Group (CCG) generated $8.5 billion in revenue, boosted by seasonal tailwinds, a healthier pricing mix, and the introduction of Intel’s latest Lunar Lake and Arrow Lake processors.
The company reported an adjusted earnings per share of $0.23 compared to a loss of $0.46 per share in the year-ago quarter and above the consensus estimate. Adjusted gross margin came in at 40%, driven by higher revenue, a favorable product mix, and reduced inventory reserves.
One of Intel’s key 2025 objectives has been to strengthen its balance sheet, and Q3 showed a significant step forward. The company completed numerous significant transactions, generating nearly $20 billion in cash through strategic alliances and asset monetization. Notably, it secured:
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$5.7 billion from the U.S. government
-
$2 billion from SoftBank Group (SFTBY)
-
$4.3 billion from the Altera closure
-
$900 million from the Mobileye (MBLY) stake sale
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An anticipated $5 billion investment from Nvidia (expected to close by the end of Q4)
Intel ended the quarter with $30.9 billion in cash and short-term investments, repaid $4.3 billion in debt, and reiterated its commitment to deleveraging by 2026. This improved financial position gives Intel greater freedom to invest in AI, manufacturing, and foundry expansion while maintaining shareholder confidence. Furthermore, despite $3 billion in capital expenditures, Intel generated $900 million in positive adjusted free cash flow for the quarter.
While challenges remain, Intel’s Q3 showed a renewed sense of stability and momentum. Its balance sheet is stronger, liquidity is ample, and its partnerships, from Nvidia to Microsoft (MSFT), are strategically aligned with the AI revolution. If Intel maintains this pace, 2026 could be a transformative year for the company.
Overall, Wall Street rates Intel stock a “Hold.” Of the 41 analysts covering the stock, two rate it a “Strong Buy,” 33 rate it a “Hold,” one rates it as a “Moderate Sell,” and five suggest a “Strong Sell.” The stock has surpassed its average target price of $28.45. However, the Street-high estimate of $43 suggests the stock has upside potential of 13% over the next 12 months.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Intel (INTC) reported its third-quarter earnings on Thursday, Oct. 23. The beaten-down chip maker brought in a new CEO, Lip-Bu Tan, earlier in the year to help it regain lost ground in a market now dominated by Nvidia (NVDA), Advanced Micro Devices (AMD), and Taiwan Semi (TSM).
It seems the turnaround is starting to pay off. Intel’s shares have soared 101.9% year-to-date, compared to the S&P 500 Index ($SPX) gain of 14.6%.
Let’s dig into the quarterly results to see where Intel stands today and whether 2026 could be a rebound year for the company.
As Intel navigates the AI-driven computing era, Q3 numbers indicated not only a recovery, but also increased momentum in both its core and expanding businesses. In the third quarter, revenue of $13.7 billion beat Wall Street’s forecast by $515 million. Revenue also increased by 3% year-over-year and 6% sequentially. The growth was fueled by strong customer demand, efficient inventory management, and improved supply chain dynamics.
Intel’s Data Center and AI Group (DCAI) reported $4.1 billion in revenue, up 5% sequentially, driven by demand for AI servers, storage, compute, and host CPUs. Management is “cautiously optimistic” about continued CPU growth into 2026. The expanding AI infrastructure build-out is prompting some data center operators to look at long-term strategic supply arrangements that can support sustained CPU demand.
Intel Foundry generated $4.2 billion in revenue, down 4% sequentially, but performance exceeded expectations for Intel 10 and Intel 7 nodes. The long-term outlook for Intel Foundry remains highly positive. CFO David Zinsner emphasized forecasts of a tenfold rise in AI data center capacity (measured in gigawatts) by 2030, resulting in significant demand for wafers and packaging services. As one of the few companies with leading-edge manufacturing capabilities on U.S. soil, Intel is uniquely positioned to capitalize on this surge.
One of the most significant developments in the quarter was Intel’s growing cooperation with Nvidia. The two businesses are collaborating to integrate Intel’s x86 processors with Nvidia’s NVLink technology. The Client Computing Group (CCG) generated $8.5 billion in revenue, boosted by seasonal tailwinds, a healthier pricing mix, and the introduction of Intel’s latest Lunar Lake and Arrow Lake processors.
The company reported an adjusted earnings per share of $0.23 compared to a loss of $0.46 per share in the year-ago quarter and above the consensus estimate. Adjusted gross margin came in at 40%, driven by higher revenue, a favorable product mix, and reduced inventory reserves.
One of Intel’s key 2025 objectives has been to strengthen its balance sheet, and Q3 showed a significant step forward. The company completed numerous significant transactions, generating nearly $20 billion in cash through strategic alliances and asset monetization. Notably, it secured:
-
$5.7 billion from the U.S. government
-
$2 billion from SoftBank Group (SFTBY)
-
$4.3 billion from the Altera closure
-
$900 million from the Mobileye (MBLY) stake sale
-
An anticipated $5 billion investment from Nvidia (expected to close by the end of Q4)
Intel ended the quarter with $30.9 billion in cash and short-term investments, repaid $4.3 billion in debt, and reiterated its commitment to deleveraging by 2026. This improved financial position gives Intel greater freedom to invest in AI, manufacturing, and foundry expansion while maintaining shareholder confidence. Furthermore, despite $3 billion in capital expenditures, Intel generated $900 million in positive adjusted free cash flow for the quarter.
While challenges remain, Intel’s Q3 showed a renewed sense of stability and momentum. Its balance sheet is stronger, liquidity is ample, and its partnerships, from Nvidia to Microsoft (MSFT), are strategically aligned with the AI revolution. If Intel maintains this pace, 2026 could be a transformative year for the company.
Overall, Wall Street rates Intel stock a “Hold.” Of the 41 analysts covering the stock, two rate it a “Strong Buy,” 33 rate it a “Hold,” one rates it as a “Moderate Sell,” and five suggest a “Strong Sell.” The stock has surpassed its average target price of $28.45. However, the Street-high estimate of $43 suggests the stock has upside potential of 13% over the next 12 months.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
