Intel released its first-quarter earnings after the close of U.S. markets on Thursday, with results significantly surpassing Wall Street expectations, signaling a potential recovery for the previously struggling chip giant. The company's stock soared 16% in after-hours trading.
A comparison of the company's actual performance with analyst estimates from Refinitiv is as follows: - Adjusted earnings per share: $0.29, compared to an expectation of just $0.01. - Revenue: $13.58 billion, versus an expected $12.42 billion.
Intel has recently gained favor on Wall Street; by Thursday's close, its stock had risen over 80% for the year, and its gains for the full year 2025 reached 84%. The Trump administration has strongly supported Intel, with the U.S. government becoming its largest shareholder last year after an injection of funds, aiming to reshore the semiconductor supply chain. Nvidia and SoftBank have also invested billions of dollars in Intel.
Previously, during the early rise of the artificial intelligence industry, Intel's technology lagged significantly behind competitors like Nvidia and AMD, leading to concerns about its long-term growth momentum.
Now, a turnaround appears underway: company revenue increased 7.2% year-over-year to $13.58 billion, up from $12.67 billion in the same period last year. This follows a trend where Intel had reported year-over-year revenue declines in five of the preceding seven quarters.
Intel provided strong guidance for the second quarter, forecasting revenue between $13.8 billion and $14.8 billion and adjusted earnings per share of $0.20, substantially higher than analyst expectations of $13.07 billion in revenue and $0.09 per share.
The Data Center segment was the primary driver of this growth. Bolstered by a surge in CPU demand, Intel is gradually gaining traction in the AI sector, with revenue for this division soaring 22% year-over-year to $5.1 billion.
The long-dormant CPU market is experiencing a resurgence, as computational demands for AI agents are no longer solely reliant on Nvidia's GPUs, which have long dominated the AI field. The rising demand for CPUs also supports Intel's recent major investment: spending $14 billion to repurchase a 49% stake in its Irish wafer fab previously sold to Apollo Global Management.
Intel remains in a loss-making position: the company's net loss widened to $4.28 billion, or a loss of $0.73 per share, compared to a net loss of $887 million, or $0.19 per share, in the same quarter last year.
Intel employs a unique business model within the industry: as an Integrated Device Manufacturer (IDM), it both designs and manufactures its own end-chip products and develops its own chip manufacturing processes. In contrast, most chip companies outsource the complex and costly manufacturing stage to large foundries like TSMC.
Revenue for Intel's foundry business increased 16% year-over-year to $5.4 billion, although the majority of this business's capacity is still dedicated to producing Intel's own chips.
Intel's Core Ultra 3rd generation processors began shipping in January of this year, and the new Xeon 6+ data center processors launched in March. Subsequently, Google announced it would adopt multiple generations of Intel CPUs for AI computing operations in its data centers.
Intel's latest personal computer and data center processors are produced using the 18A process at its new large wafer fab in Arizona. Although this process technology is positioned as competitive with TSMC's 2-nanometer process, Intel currently remains the primary customer for its own 18A wafer fab.
A key future challenge for Intel will be persuading long-term TSMC customers to switch to its foundry services.
Previous iterations of Intel's manufacturing processes have faced multiple delays, and the 18A wafers have encountered yield issues, resulting in a lower number of viable chips per wafer. Some analysts are still monitoring the yield performance of Intel's next-generation 14A process, which is scheduled for deployment in 2028 and beyond. Intel has previously stated it will commit funding for mass production of new processes only after securing major customer partnerships; however, CEO Pat Gelsinger stated on a social platform in January that Intel is fully committed to developing the 14A process.
The long-anticipated core customer is likely Elon Musk, though specific details have not been fully disclosed. Earlier this month, Intel announced it would establish operations within Musk's Terra wafer fab industrial park in Austin, Texas, to conduct large-scale research, development, manufacturing, and packaging of high-performance chips for SpaceX, AI company xAI, and Tesla.
During Tesla's first-quarter earnings call, Musk revealed that Tesla plans to utilize Intel's future 14A process technology to produce chips at the industrial park for use in Tesla vehicles, humanoid robots, and a planned orbital data center for SpaceX.
Musk noted that Intel's 14A process is still in development but expressed confidence that "by the time the Terra wafer fab industrial park is scaled for volume production, the 14A process will be mature enough for commercial deployment."
Intel's strategic reboot of its external foundry business began in 2021 under CEO Pat Gelsinger. Gelsinger stepped down in 2024 and was succeeded by the current CEO, Pat Gelsinger, early last year.
In July of the same year, Intel cut 15% of its workforce and halted construction on wafer fab projects in Germany and Poland; the timeline for the large Ohio fab project was also pushed back from an initial target of this year to 2030. In an internal memo regarding the layoffs, the CEO wrote that over recent years the company had invested at a scale and pace that far exceeded actual market demand.
