3 takeaways from Intel’s third quarter earnings report
Intel It ended a losing streak of six consecutive quarters and returned to profitability in the third quarter.
The US chipmaker posted strong revenue in its first earnings report since the Trump administration bought a 10% stake in the company, noting that it expects strong demand for chips to continue into 2026.
Customer computing revenue, which includes chips for PCs and laptops, increased 5% year over year, benefiting from the stabilization of the PC market and expectations for AI PCs.
AI “is a strong foundation for sustainable long-term growth as long as we execute,” CEO Lip-Bu Tan said on a call with analysts on Thursday.
Chip power and demand were bright spots, but there were also areas of concern, with the company’s foundry business still needing a major break.
Three takeaways from the chipmaker’s third-quarter report:
Cash flow
“We significantly improved our cash position and liquidity in the third quarter, which has been a key focus for me since I became CEO in March,” Tan said on a call with analysts on Thursday.
While Intel received an investment of $8.9 billion from the US government in August, it received an investment of $2 billion from Intel. softbankbut has not yet received the 5 billion dollars due to the agreement Nvidia. The company expects this deal to be completed by the end of the fourth quarter.
CFO David Zinser said in a statement to CNBC that Intel will have $35 billion in cash after the completion of all these transactions and the sale of Altera.
The U.S. government is the company’s largest shareholder, and Intel shares are up more than 50% since Aug. 22, when Commerce Secretary Howard Lutnick announced the deal.
“Like every shareholder, we have to communicate with them,” Zinser said about U.S. stocks. Another Intel shareholder said, “We don’t tell them how the numbers are going before the quarter. We usually talk to them like Fidelity.”
Intel 3-month stock chart.
Foundry
The firm’s foundry is a work in progress.
Revenue was down 2% from the previous year, and it has yet to land a major customer.
Intel now has two fabs running 18A nodes designed for artificial intelligence and high-performance computing applications.
“We are making steady progress on Intel 18A,” Tan said of the latest chip technology. “We are on track to bring Panther Lake to market this year.”
Zinser said the more advanced 14A nodes will not be supplied until the company has “real solid demand.”
Old items are still for sale
The company’s legacy chip manufacturing processes, or nodes, continue to perform well, and “that’s probably the more unexpected part,” Zinser said.
Zinser said the chip maker is meeting some of its central processing unit (CPU) demand with inventory on hand, but they will be behind in the first quarter, “probably in the second quarter and maybe in the third quarter.”
The supply shortage was due to outdated Intel 10 and 7 manufacturing technologies.
Many customers choose less advanced hardware to upgrade their operating systems; This shows that businesses aren’t waiting for the latest chips when proven technology gets the job done.
