This is the first earnings report for Intel since it announced last month that the US government, Nvidia and SoftBank had made a combined investment of $15.9 billion, with more investors speculating on more inflow in the future.
Intel beat analysts’ expectations for third-quarter profits, owing to CEO Lip-Bu Tan’s new measures, which helped reduce costs and attract some high-profile investments. Company shares also rose 7%. Intel’s shares have risen nearly 90% so far in 2025 on account of new investments pouring in.
This is the first earnings report for the company since it announced last month that the US government, Nvidia and SoftBank had made a combined investment of $15.9 billion, with more investors speculating on more inflow in the future.
The US government invested $8.9 billion into Intel to advance domestic semiconductor production and research. $5.7 billion was disbursed in the last quarter, with the company having the flexibility to scale manufacturing and research and development efforts. Nvidia, on the other hand, invested $5 billion and has also agreed to long-term collaboration on AI, consumer technology and data centre development.
Through this partnership, Intel’s CPUs will be equipped with Nvidia’s AI systems, thus integrating the computing power of both tech giants. Nvidia has also promised a 4% stake once new shares are issued. Japan’s SoftBank also invested $2 billion in the US-based chip manufacturer, further boosting confidence in it’s long-term strategies.
Such investments and partnerships are vital to Intel’s survival in the industry, as it has been struggling to compete with Advanced Micro Devices, losing its dominance in the PC and server CPU markets. Moreover, it has also had little success in its attempts to break into the AI chip market, which is already dominated by stalwarts like Nvidia.
These concerns culminated in Intel’s shares dropping nearly 60% last year, and the credit for its improved performance this year must go to the new investments the company has managed to procure. The chip maker’s shares have even outperformed AI leader Nvidia.
While these investments have helped Intel improve its performance, the company was in murky waters not too long ago when US President Donald Trump accused CEO Tan of having ties with China and calling for his resignation. However, soon after, in August, Trump announced that the US would own a 10% stake in Intel, in a deal where government bonds are converted into equity shares.
As part of this deal, Trump said that 433.3 million Intel shares would soon be purchased, using funding from the $5.7 billion in unpaid grants under the CHIPS Act introduced by the Biden administration, and from the $3.2 billion that it was to receive as part of the Secure Enclave program.
However, these opportunities now mark a new era for Intel. Tan said that a central engineering group has recently been formed and will augment the company’s efforts in streamlining its chip design work, along with providing custom-designed chips for external customers. As it enters this new market, Intel will have to compete with established players like Broadcom and Marvell Technologies, whose customer base includes Google and Amazon.
Demand for Intel’s chips is favourable, and the company has maintained that supply is constrained at the moment. However, company CFO Dave Zinsner said in an interview with Reuters that the yields from it’s 18A manufacturing method, which show the percentage of its chips that are created with good performance, need to reach the right level of profit, but they are not there. It would probably take until 2027 for yields to reach an industry-acceptable level.
Intel announced adjusted earnings of 23 cents per share in the fourth quarter, exceeding expectations of 1 cent per share, and adjusted gross margins of 40%, exceeding projections of 35.7%.
Tan has drastically reduced the costly production targets set by his predecessor, Pat Gelsinger, and the company announced in July that it will conclude the year with a workforce that is more than a fifth fewer than it was the previous year.
