- Intel reported Q3 revenue of $13.65 billion, surpassing analyst estimates of $13.14 billion and signaling a recovery in the PC market.
- This marks the first earnings report since the U.S. government became the company’s top shareholder with a 10% stake.
- The company announced a new strategic partnership with former rival Nvidia, which includes a $5 billion investment.
- Intel shares jumped more than 6% in extended trading following the positive news.
Intel Defies Expectations Amid Government Takeover
Intel (INTC) delivered a stronger-than-expected third-quarter earnings report on Thursday, with revenue numbers that beat Wall Street estimates and sent its stock soaring in after-hours trading. The chipmaker posted revenues of $13.65 billion, comfortably ahead of the $13.14 billion consensus estimate, suggesting a significant recovery in demand for its core PC and laptop processors.
The report is a critical first look into the company’s performance since the U.S. government became its largest shareholder in August, acquiring a 10% stake through an $8.9 billion investment. The move has introduced unique accounting challenges, with Intel warning investors that its financial results may be revised pending guidance from the Securities and Exchange Commission.
Government Stake and Strategic Alliances
The government’s investment, negotiated by the Trump administration, involved the purchase of 433.3 million shares. Intel received $5.7 billion from the deal during the third quarter. This unprecedented relationship has led to complex accounting, which the company noted has “limited precedent.”
Adding to the quarter’s surprises, Intel also secured a $5 billion investment from its long-time competitor, Nvidia. This landmark deal will see the two tech giants collaborate to integrate Intel’s CPUs with Nvidia’s dominant artificial intelligence GPUs, a move aimed at revitalizing Intel’s data center business.
Divisional Performance: A Mixed Bag
While the overall revenue was a clear win, a closer look at Intel’s divisions reveals a mixed performance.
Client Computing Group Shines
The Client Computing Group, which includes chips for PCs and laptops, was the standout performer, reporting $8.5 billion in sales, a 3% increase year-over-year. This growth indicates that the prolonged slump in the PC market may finally be turning a corner.
Data Center and Foundry Face Headwinds
Conversely, the data center division saw sales decline by 1% to $4.1 billion. The new partnership with Nvidia is a strategic play to reverse this trend. Meanwhile, the ambitious Intel Foundry division, which aims to manufacture chips for other companies, reported $4.2 billion in sales, down 2%. Critically, all of these sales were internal, as the division has yet to secure a major external customer for its cutting-edge manufacturing, which requires a staggering $100 billion in capital investment.
For its fourth-quarter outlook, Intel projects revenue of around $13.3 billion, aligning closely with analyst expectations.
Cramer’s Mad Dash: Intel