Lip-Bu Tan, CEO of Intel Corp., departs following a meeting at the White House in Washington, Aug. 11, 2025.
Alex Wroblewski | Bloomberg | Getty Images
Intel reported first-quarter earnings that significantly surpassed Wall Street’s expectations on Thursday, signaling a potential resurgence for the historically dominant chipmaker. The positive results sent shares of the U.S. chip giant soaring approximately 20% in after-hours trading.
The company’s performance data, as compared to estimates from analysts polled by LSEG, paints a picture of robust recovery:
- Earnings per share (EPS): Intel posted adjusted EPS of 29 cents, a substantial beat against the 1 cent consensus forecast.
- Revenue: The company generated $13.58 billion in revenue, comfortably exceeding the anticipated $12.42 billion.
Intel has been a subject of considerable Wall Street attention recently, with its stock already up over 80% year-to-date as of Thursday’s close, following an impressive 84% surge in 2025. This renewed investor confidence is partly fueled by strategic government backing, with the U.S. administration having become the largest shareholder as part of a broader initiative to bolster domestic chip manufacturing capabilities. Significant investments from technology heavyweights like Nvidia and SoftBank have further underscored the market’s growing interest in Intel’s turnaround narrative.
However, the company has faced considerable headwinds in recent years, falling behind rivals Nvidia and Advanced Micro Devices (AMD) in the critical early stages of the artificial intelligence (AI) boom. This has limited its momentum in a market increasingly defined by AI-driven demand. The latest earnings report suggests this challenging trend may be shifting.
Intel’s revenue for the quarter climbed 7.2% year-over-year from $12.67 billion, a welcome development after experiencing revenue declines in five of the preceding seven quarters. Looking ahead, the company provided a strong outlook for the second quarter, projecting revenue between $13.8 billion and $14.8 billion, with adjusted EPS expected to be around 20 cents. These figures comfortably surpass analyst expectations of $13.07 billion in revenue and 9 cents in EPS, reinforcing the sentiment of a revitalized business.
A key driver of this growth appears to be Intel’s data center segment, which is beginning to capture significant market share in AI applications due to escalating demand for central processing units (CPUs). Revenue in this division surged by 22% to $5.1 billion. This growth is particularly noteworthy as the CPU market, once considered somewhat quiescent, is experiencing a renaissance. The increasing complexity of AI workloads is driving compute needs beyond the capabilities of graphics processing units (GPUs), which have historically dominated AI hardware. This shift is bolstering demand for powerful CPUs, a trend that underpinned Intel’s recent $14 billion acquisition of a 49% stake in its Irish chip fabrication plant, previously divested to Apollo Global Management.
“The CPU is reinserting itself as the indispensable foundation of the AI era,” stated Intel CEO Lip-Bu Tan during the company’s earnings call. “This isn’t just our wishful thinking; it’s what we hear directly from our customers.”
Despite the positive revenue and EPS figures, Intel is still navigating a period of net losses. The company reported a widened net loss of $4.28 billion, or 73 cents per share, compared to $887 million, or 19 cents a share, in the prior year. This ongoing financial deficit highlights the substantial investments required for its manufacturing advancements and market re-positioning.
Intel operates under a unique business model as an integrated device manufacturer (IDM), designing and producing its own silicon. This contrasts with many other chipmakers that outsource their complex and capital-intensive manufacturing processes to foundries like Taiwan Semiconductor Manufacturing Company (TSMC). This integrated approach allows Intel greater control over its technology roadmap and production, but also presents significant financial obligations.
Foundry revenue at Intel experienced a healthy 16% increase year-over-year, reaching $5.4 billion. While a significant portion of this foundry business involves manufacturing Intel’s own chips, it also signifies growing external partnerships.
Intel’s latest innovations, including its Core Ultra Series 3 processors for PCs launched in January and its new Xeon 6+ data center processors introduced in March, are beginning to gain traction. Notably, Google has committed to utilizing multiple generations of Intel’s CPUs for its AI workloads, a significant endorsement. These advanced processors are manufactured using Intel’s cutting-edge 18A process node at its new fabrication facility in Arizona. Intel currently stands as the sole major customer for its 18A chip fabs, a testament to the technological sophistication of the node, which is comparable to TSMC’s 2-nanometer process.
The pivotal challenge for Intel lies in persuading established TSMC customers to migrate to its foundry services. The company is in the process of overcoming historical delays experienced with previous manufacturing nodes. While the 18A node shows promise, some initial wafer production has encountered defects, impacting the number of usable chips per wafer, a metric known as yield. Investors and industry observers are closely watching the yield performance of Intel’s next-generation 14A technology, slated for release in 2028 or beyond.
CEO Lip-Bu Tan previously indicated that Intel would await a major customer commitment before fully ramping up the 14A technology. However, in a January X post, Tan announced that Intel is “going big time into 14A,” signaling a more aggressive development strategy. He further elaborated on the earnings call that “multiple customers” are “actively evaluating the technology” and that its development is proceeding at a faster pace than anticipated for the 18A node.
A potentially transformative customer for Intel’s advanced nodes could be Elon Musk’s ventures. Intel recently announced a collaboration with Musk’s Terafab chip complex in Austin, Texas, aimed at designing, fabricating, and packaging ultra-high-performance chips at scale for SpaceX, xAI, and Tesla. During Tesla’s first-quarter earnings call, Musk indicated that the company plans to leverage Intel’s forthcoming 14A process for chip production at the Austin facility, which will serve Tesla’s vehicles and robots, as well as future orbital datacenters for SpaceX. Musk expressed confidence that by the time the Terafab scales up, the 14A process will be “fairly mature or ready for prime time.”
On Intel’s earnings call, Tan echoed Musk’s sentiment, stating, “Elon and I share a strong conviction that global semiconductor supply is not keeping pace with the rapid acceleration in demand,” and emphasized their mutual pursuit of “unconventional ways to improve manufacturing efficiency.”
Intel’s renewed strategic focus on serving external foundry customers began under former CEO Pat Gelsinger, who took the helm in 2021. Gelsinger was succeeded by Tan early last year. The company has undergone significant restructuring, including a 15% workforce reduction in July and the cancellation of chip fab projects in Germany and Poland. The construction of Intel’s major chip fab in Ohio has been delayed until 2030, a significant shift from its initial plan to commence production this year. Tan acknowledged in a prior memo that the company had “invested too much, too soon – without adequate demand” in recent years.
The strong second-quarter guidance may also be bolstered by Intel’s expertise in advanced packaging, a critical element in the AI chip supply chain. This process involves connecting individual chip dies to form a larger, integrated system. Intel is one of only three global companies offering the most advanced packaging solutions, a capability that is becoming a significant bottleneck in the race to meet the soaring demand for AI chips. Intel CFO David Zinsner expressed confidence that advanced packaging will generate billions of dollars per customer, revising an earlier estimate of hundreds of millions. Intel’s advanced packaging clients include Amazon, Cisco, and now, the recently announced partnerships with SpaceX and Tesla.
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