To The Moon

On Thu, 24 Jul 2025 - $Intel(INTC)$ released its much-anticipated Q2 earnings as scheduled.

It is a mixed set of earnings that (to me, personally is showing signs of stabilization, thanks in part to slashing expenses, to keep both company and business afloat.

Q2 Earnings.

According to estimates by LSEG:

• Loss per share (adjusted) : was -$0.10 per share vs analysts’ consensus of $0.01 vs Q2 2024’s $0.02; that represents a -600% YoY, decline in EPS. (see above)

• This was due to the $800 million impairment charge, that is “related to excess tools with no identified re-use”,

• Revenue fared marginally better.

• INTC reported $12.86 billion versus analysts polled estimates of $11.92 billion vs Q2 2024’s $12.72 billion; that is a +1.1% YoY gain.

Q3 Guidance / Outlook.

• INTC shared an upbeat Q3 revenue forecast of between $12.6 billion & $13.6 billion.

• Wall Street was expecting $12.6 billion.

• Earnings per share is expected to be flat (0.0%), while analysts are looking for $0.04 per share.

INTC’s direction.

As INTC is playing catch up on sales to boost revenue, there is really nothing much to focus on financially.

Understanding & seeing what new CEO Lip-Bu Tan has done since March 2025, and what he plans to do next, should help investors understand where Intel is heading.

(1) Q3 2025 (near-term):

• Strict Capital Control: All new chip factory (fab) investments, including the new 14A process and Ohio fab, will be paced or scaled only if anchored by customer commitments.

• Leadership Accountability: CEO Tan will personally approve all chip tape-outs, signaling direct oversight of product execution

(2) 2nd Half of 2025:

• Cost Structure: Further execution of operating expense reduction towards $17 billion in 2025, targeting $16 billion in 2026.

• Headcount / Organization Simplification: Layoffs are mostly completed, with the workforce stabilized by year-end.

• Foundry Restructuring: Major foundry projects in Germany & Poland have been cancelled. Testing /assembly will be consolidated in Vietnam and Malaysia. Pace of Ohio fab construction will be “slowed” unless demand materializes.

• Product and Segment Focus: Personal computer (PC) is under pressure as sales continued to consolidate at -3.0% YoY. On the other hand, data center revenue grew modestly by +4.0%. Regaining server share is a priority, with a search underway for permanent leadership.

2026 and Beyond:

• Capital Spending: Intel plans to reduce gross capital expenditures (CAPEX), projecting $18 billion for FY 2025 and lower in 2026, as the restructuring and capital discipline take full effect.

• Process Development: The forthcoming 14A manufacturing process will advance only as customer contracts are secured—ending the “blank check” investment approach.

Stock Movement.

• Intel’s new CEO, Lip-Bu Tan assumed his role on 18 Mar 2025 and commenced restructuring shortly.

• INTC stock is up by +11.92% YTD (as of Thu, 24 Jul 2025), after plummeting -60% in 2024, their worst year on record. (see above)

My viewpoints: (mine only)

When I went through (a) CEO Lip Bu Tan’s note to his staff, (b) INTC’s quarterly earnings and (c) Q3 guidance, I cannot help but spotted a gap; not the fault of the company.

Rather, most journalist did not join the dots between INTC’s direction and the fundings they received under ex-President Biden’s CHIPS Act funds. (see below)

The CHIPS Act funds allocated to Intel (up to $7.86 billion) will be disbursed by US Dept of Commerce based on Intel achieving specific, pre-agreed construction and project milestones at U.S. sites in (i) Arizona, (ii) New Mexico, (iii) Ohio, and (iv) Oregon.

There’s no mention of slow down to the Arizona, New Mexico and Oregan constructions except for Ohio.

It would be very helpful if INTC provide clarity about the fundings and how it will support the company to get back on the AI-track, that is here to stay.

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