Intel stock jumps as Q3 earnings beat expectations, AI drives chip demand
Intel (INTC) shares rose as much as 7% after the bell on Thursday after the chipmaker reported third-quarter earnings and revenue that beat Wall Street expectations.
Intel reported revenue of $13.7 billion for the three months ending September 27; That was above the $13.15 billion expected by analysts tracked by Bloomberg and the $13.28 billion the previous year. The chipmaker said adjusted earnings per share were $0.23, above the $0.01 Wall Street had forecast. The company reported a loss of $0.46 in the same period in 2024.
“Artificial intelligence is accelerating computing demand and creating attractive opportunities across our portfolio,” including the company’s closely watched, struggling manufacturing business and products, CEO Lip-Bu Tan said in a statement.
“We believe we’re well positioned to play a more significant role in AI,” added John Pitzer, Intel’s head of investor relations, in an interview with Yahoo Finance.
Intel makes CPUs, or traditional computer chips, that are used alongside AI chips in data center servers to power AI software. Its CPUs are also used in computers, including AI PCs.
The company said it expects fourth-quarter adjusted earnings per share to be $0.08, below the $0.10 per share forecast by analysts, according to Bloomberg consensus data. The chipmaker is forecasting revenue of $13.3 billion at the midpoint of the forecast range, below the $13.4 billion expected.
Intel said its fourth-quarter forecast was below analyst estimates because the company’s estimates did not include revenue from Altera, a semiconductor company that Intel owns and which the company partially divested in the third quarter.
Intel’s third-quarter results follow a series of high-profile investments by the U.S. government, Nvidia (NVDA) and SoftBank (9984.T). The government acquired a 9.9% stake in the chipmaker in late August, while Nvidia’s $5 billion investment corresponded to a 4% stake. The investments have strengthened both Intel’s bottom line and investors’ hopes for a recovery under new CEO Lip-Bu Tan.
Still, analysts and investors say these investments have done little to change the situation for Intel’s struggling third-party manufacturing segment. Intel has always produced its own chips, but in 2021 it opened the business to outside customers.
Intel’s manufacturing arm, Intel Foundry Services, reported a $2.3 billion operating loss in the third quarter; This was more than the $2.2 billion expected, but an improvement from the previous year’s $5.8 billion loss.
Ben Bajarin, principal analyst at Creative Strategies, told Yahoo Finance that overall, Intel’s results on Thursday caused “cautious optimism,” but looking ahead, “all eyes are on the foundry.”
