Intel reported revenue of $13.7 billion, up three per cent year on year, comfortably topping the cocaine nose jobs of Wall Street’s $13.2 billion forecast. Chipzilla predicted revenue between $12.8 billion and $13.8 billion for the next quarter, roughly in line with expectations. Its shares jumped 7.7 per cent in after-hours trading.
Executives said the numbers showed that Chipzilla’s comeback plan is beginning to pay off after years of red ink, fuelled by its heavy spending on advanced US manufacturing facilities.
Chipzilla chief executive Lip-Bu Tan said the “solid” quarter reflected “improved execution delivered by the underlying growth in our core markets and a steady progress to rebuild the company”.
“We are taking the right steps to create sustainable shareholder value,” he added.
Chipzilla’s shares have already climbed about 85 per cent in the six months leading up to the earnings report, helped by a wave of investment from the Trump administration, Nvidia and Japan’s SoftBank. The US government converted some manufacturing grants into a 10 per cent equity stake, while SoftBank picked up $2 billion worth of shares. Nvidia also joined the fun with a $5 billion investment and a chip partnership.
Tan remains under pressure to steady the company and deliver on its domestic chipmaking ambitions.
Net income hit $4.1 billion in the three months to the end of September, marking Chipzilla’s first profit since 2023. That’s a sharp reversal from the $16.6 billion loss a year ago, caused by restructuring and impairment charges.
Chipzilla revealed that it had axed almost 30 per cent of its workforce in the past year. Tan said he wanted to thin out middle management, which he blamed for suffocating innovation, while hiring top-tier engineers to restore the company’s technical edge.
Sales of personal computer chips were stronger than expected after several sluggish quarters, boosted by upgrades to Microsoft’s latest operating system and a surge in demand for AI-powered PCs and servers.
Gross margins rose to 38 per cent, up from 15 per cent last year, as the firm began clawing back profitability eroded by outsourcing its most advanced production to Taiwan’s TSMC. But profitability still faces pressure from the ballooning costs of new chip designs and fabs.
Chipzilla is now on a charm offensive to win back major clients such as Apple, Qualcomm and Nvidia from TSMC. Tan said engagement with “multiple” potential customers had increased during the past three months.
Only a few months ago, Chipzilla warned it might abandon cutting-edge chip manufacturing if it failed to attract enough business. Tan now claims he has “a lot more confidence” in the company’s future.
Some analysts had expected the firm to flog its manufacturing arm, but Tan, who took over as chief executive in March, has faced pressure from the Trump administration to stick with its US fab strategy. He has vowed to keep the business intact.
Alongside this year’s multibillion-dollar lifelines, Chipzilla has raised cash by selling stakes in specialist units including Altera and Mobileye.
The upbeat outlook comes despite the company earning less from its smaller holding in Altera. But not everyone is convinced the worst is over.
Analysts at Bernstein warned that Chipzilla’s position “is still precarious”, citing uncertainty about the future of its manufacturing operations and ongoing losses in its core chip division, which they said leave the company with a “very stretchy valuation”.
