Intel outperformed Wall Street’s Q3 revenue forecast as demand for its x86 PC processors finally picked back up, according to the earnings report released by the company on Thursday.
Intel said it generated $13.65 billion in revenue for the quarter, beating the $13.14 billion that analysts expected. The numbers were released after markets closed, and investors immediately reacted; the stock climbed 6% in after-hours trading.
For the quarter, Intel reported a net income of $4.1 billion, or 90 cents per share, a sharp reversal from the $16.6 billion net loss it posted in the same period last year. But that wasn’t the full picture. The company also booked a 37 cents per-share loss tied to an $8.9 billion equity agreement with the U.S. government. That deal was brokered in August by President Donald Trump’s administration, which acquired 433.3 million shares at $20.47 apiece. The shares are currently held in escrow and are expected to be released later.
Intel’s third-quarter results were complex. While the official adjusted earnings per share came in at 23 cents, the company noted that the figure wasn’t directly comparable to analyst estimates due to the impact of the U.S. government’s equity stake. David Zinsner, Intel’s CFO, said during the earnings call that “there is limited precedent for the accounting treatment of such transactions.” He also confirmed that Intel had tried to meet with the Securities and Exchange Commission to get a green light on how they booked the deal, but due to the ongoing U.S. government shutdown, there’s been no response from the SEC. Zinsner said future revisions to earnings “are possible.”
Intel forecasts softer Q4 as Nvidia alliance moves ahead
For the final quarter of the year, Intel said it’s projecting $13.3 billion in revenue at the midpoint, alongside 8 cents in adjusted earnings per share. Analysts had been expecting $13.37 billion in revenue and the same 8 cents EPS, though the company clarified that its forecasts exclude the impact of the Altera subsidiary sale, which was finalized earlier this quarter.
In September, Intel brought in a $5 billion investment from Nvidia, a former rival in the chip industry. As part of that deal, the two companies will work together, combining Intel’s central processors (CPUs) with Nvidia’s graphics processors (GPUs), which currently make up 90% of the AI chip market. Intel’s data center CPU sales came in at $4.1 billion for the quarter — a 1% decline compared to last year — and executives are hoping the Nvidia deal helps turn that around. The Client Computing Group, which handles PCs and laptops, brought in $8.5 billion, part of the company’s total $12.7 billion in product revenue, up 3% year-over-year.
The company also said demand for its chips is currently outstripping supply, and they don’t see that easing anytime soon. “We expect that imbalance to persist into 2026,” Zinsner said on the call. Despite rising demand, the company’s manufacturing arm — Intel Foundry — remains a work in progress. It reported $4.2 billion in sales, but the entire figure came from Intel building chips for itself. No third-party customers have been secured yet. The foundry is seen as a long-term play, with the company saying it will require $100 billion in capital to scale properly. Intel confirmed that production of its most advanced chips has already started at its Arizona plant.
Intel workforce drops as foundry expansion stalls
Investors are keeping close watch on Intel Foundry, but the immediate numbers haven’t impressed. Sales dropped 2% year-on-year, and for now, the foundry isn’t making money from outside contracts.
That hasn’t stopped Intel from investing heavily. Executives said they are still committed to transforming the unit into a global manufacturer that serves other chipmakers. But as of Q3, that vision hasn’t materialized.
And while demand is up, headcount is down. The company confirmed that it now has 88.4 million employees, a steep decline from the 124 million it reported at the same time last year. No additional context was provided about the reduction, but it adds to the list of restructuring moves Intel has made since the beginning of the year.
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