(Bloomberg/Ian King) — Intel Corp. shares jumped after the chipmaker returned to profitability and gave an upbeat revenue forecast, suggesting that it’s making progress on a long and challenging comeback attempt.
Fourth-quarter sales will be roughly $13.3 billion, the company said in a statement Thursday. Though that was just below Wall Street’s average estimate, some analysts were still including revenue from a unit that Intel just spun off — money that wasn’t part of the company’s forecast.
Shares rose 3.9% to $39.66 at 9:50 a.m. in New York on Friday.
The outlook signals that Intel is on the right track following a turbulent year. In the stretch of a few months, new Chief Executive Officer Lip-Bu Tan secured an unconventional investment from the US government — a transaction brokered by the White House — and won backing from Nvidia Corp. and SoftBank Group Corp.
Related Articles
Silicon Valley tech giant to cut more than 1,400 jobs after sales slow
California parents claim OpenAI weakened chatbot anti-suicide protections just before teen’s death
Rivian cuts about 600 jobs in latest setback for EV maker
Rivian mobility spinoff readies $4,500 e-bike as first product
South Bay office market values plunged in 2024, report shows
Investors applauded those deals, sending Intel shares up 90% this year. The company went from being one of the worst performers in the Philadelphia Stock Exchange Semiconductor Index to one of the best. The value of the US government’s stake is about $17.2 billion, an $8.3 billion gain on paper since the deal was inked in August. Under that agreement, the government said it would buy 433.3 million shares of Intel’s common stock at $20.47 per share.
But concerns have lingered over whether Intel can manufacture products that attract customers again. Though the company remains the biggest maker of personal computer processors, that market has been less reliable in recent years. Intel also has struggled to capitalize on the surge in artificial intelligence spending — a frenzy that has greatly benefited Nvidia.
For now, a PC rebound is helping bolster Intel’s results.
“Current demand is outpacing supply, a trend we expect will persist into 2026,” Chief Financial Officer Dave Zinsner said in the statement. The company’s third-quarter results exceeded its projections, based on “the underlying strength of our core markets,” he said.
The shares gained about 8% in late trading after closing at $38.16.
In another promising sign, Intel returned to profitability in the period that ended Sept. 27. The Santa Clara, California-based company posted its first quarterly net income since the end of 2023.
Intel spun off its Altera programmable chip unit in September and now owns a minority stake in the business. That removed $400 million to $500 million in revenue from its fourth-quarter projection.
Intel’s guidance “looks better” compared with estimates if you strip out the Altera sales, Zinsner said in an interview.
The deals with the US government and tech companies are bringing about $15 billion of new funds that can help shore up Intel’s balance sheet. This month, the chipmaker also announced new products and manufacturing technology. Those operational improvements will have to kick in – helping Intel win back lost market share and production orders – before the company’s financial state will fundamentally improve.
In the third quarter, revenue rose 3% to $13.7 billion. Profit was 23 cents a share, excluding some items. Analysts had estimated sales of $13.2 billion and earnings of 1 cent on average, according to data compiled by Bloomberg.
Intel said on a conference call that it repaid $4.3 billion in debt during the third quarter, ending the period with $30.9 billion in cash and short-term investments. Nvidia’s $5 billion investment, announced last month, is expected to close in the current quarter.
Investors are waiting for Intel’s CEO to give more concrete details on how he plans to reclaim leadership of an industry it dominated for decades. Tan was named to the job in March, following the ouster of Pat Gelsinger last year.
Tan has indicated so far that he’ll pursue a similar approach as Gelsinger — but with much tighter financial discipline. That means cutting jobs and holding off on manufacturing plans if the return on investment isn’t clear.
But that stance has raised its own concerns because it suggests Intel may no longer stay at the cutting edge of the chip industry. Slowing the construction of new factories also has drawn flak from politicians who are looking to foster domestic manufacturing.
Intel’s factories, despite falling behind the capabilities of rivals such as Taiwan Semiconductor Manufacturing Co., are the most advanced plants owned and operated by any American company in its home country.
Under Gelsinger, Intel had vowed to turn a site in Ohio into the world’s biggest chipmaking facility. That project has now been delayed until the 2030s, but the company recently said it remains committed to the plan.
Intel plans to spend about $18 billion on new plants and equipment this year and reduce its outlay next year. That level puts it far below what TSMC is spending.
Zinsner, the CFO, said that the company may now be faced with the “high-class problem” of having to spend more next year than it budgeted — to make sure it has enough supply to meet improving demand.
Intel’s client computing division had revenue of $8.5 billion last quarter, topping the average prediction of $8.2 billion. Data center sales were $4.1 billion, compared with a $3.97 billion estimate.
The Intel Foundry division — its factory unit — generated revenue of $4.2 billion. That unit currently relies almost exclusively on Intel product divisions for orders, though it is seeking outside clients.
The business is unprofitable, and finding those external customers is seen as key to turning it around. Intel Foundry had an operating loss of $2.3 billion in the third quarter. Still, that was narrower than the $5.8 billion loss a year earlier and better than the $3.2 billion loss suffered in the second quarter.
“My conviction in the market potential for Intel Foundry continues to grow,” Tan said on the call.
Bernstein analyst Stacy Rasgon urged a cautious approach in a research note dated Friday. “We understand the desire to claim victory for the embattled company, but this fight is far from over; perhaps it’s better to call it a draw for now,” he said.
(Updates with US government stake value in the fifth paragraph and analyst comment in the last paragraph.)
More stories like this are available on bloomberg.com
©2025 Bloomberg L.P.