Intel will release its Q3 2025 financial report after the market closes on October 23. According to Bloomberg analysts' expectations, Intel's adjusted net profit for the third quarter is expected to be $26.78 million, a slight year-on-year increase of 0.37%; Intel's third-quarter operating revenue is expected to be $13.1 billion, a slight year-on-year increase of 0.03%.
Last Quarter Review
Intel achieved revenue of $12.9 billion in the second quarter, exceeding analysts' expectations of $11.9 billion. Its core data center and AI revenue also surpassed expectations. However, behind this seemingly strong performance is "dismal" profitability. Specifically:
Profitability is the core pain point: adjusted loss per share was $0.10, far below the market's expectation of profit. The adjusted gross margin for the second quarter was only 30%, expected to rebound to 36% in the third quarter. The midpoint of the third-quarter revenue guidance ($12.6-13.6 billion) was higher than expected, but the profit guidance was only "breakeven," once again below the market's expectation of $0.04 per share.
Foundry business as a "financial black hole": PC computing income was $7.9 billion, data center income was $3.9 billion, both exceeding expectations, partly due to PC manufacturers stockpiling in advance to cope with potential tariffs. However, the chip foundry business recorded a $3.17 billion operating loss despite contributing $4.4 billion in revenue.
The company will cancel its factory projects in Germany and Poland, slow the progress of the Ohio factory, and future investments in advanced processes like 14A will strictly depend on "confirmed customer orders."
Massive layoffs and cost reduction: The company has completed most of its layoff plans, with a layoff ratio of 15%, and plans to further reduce the total number of employees by over 20% from the end of the second quarter to 75,000 by the end of the year. The goal is to reduce operating expenses to $17 billion by 2025.
This Quarter Outlook
Collaboration with Nvidia
Nvidia invested $5 billion in Intel and will jointly develop chips for PCs and data centers with Intel. According to the agreement, Nvidia will acquire Intel common stock at $23.28 per share.
Regarding the collaboration, Intel will introduce Nvidia's graphics processing technology into the next generation of PC chips and provide processor support for data center products built on Nvidia hardware.
New AI Chip Progress
Intel plans to launch a new AI chip for data centers next year. Intel CTO Sachin Katti stated that the new chip (GPU) will be optimized for energy efficiency and support various uses, such as running AI applications or inference. This means Intel is once again trying to penetrate the AI chip market.
This new chip named Crescent Island represents the latest attempt by this struggling U.S. chip manufacturer to capitalize on the AI spending boom, which has generated billions in revenue for AMD and Nvidia.
Analyst Views
Overall, Wall Street analysts remain cautious about Intel, with an average rating of "Hold."
Among the 41 analysts tracking the stock, 2 have given it a "Strong Buy" rating, 33 a "Hold" rating, 1 a "Moderate Sell" rating, and 5 a "Strong Sell" rating.
UBS maintains a "Neutral" rating, with the model assuming Q3 revenue of approximately $12.8 billion and earnings per share of approximately $0.16, focusing on the improvement in CCG quarter-on-quarter and DCAI profit margin trends.
Goldman Sachs slightly lowered Intel's Q3 revenue to approximately $12.6 billion and earnings per share to approximately $0.15, emphasizing that "Gaudi 3 supply progress and Xeon 6 share" are decisive variables. Bernstein maintains a "Market Perform" rating, pointing out that "Q2 advance stockpiling may have overdrafted Q3, and the profitability of the foundry investments and product roadmap remains to be verified."
This content is generated based on Tiger AI and Bloomberg data, for reference only.