Intel Shares Surge After Strong Quarterly Results and Outstanding Earnings Beat

Intel’s Comeback Story Just Got Stronger

What a turnaround story it has been for Intel. Not long ago, sentiment across the market was that the company was heading for irrelevance, overshadowed by new giants like NVIDIA whose competitive advantages seemed impossible to match. Fast-forward to today, and INTC is staging a genuine comeback. Backed by U.S. government funding and stronger execution across its operations, the company just delivered another impressive earnings beat that pushed the stock up more than 5%.

This marks Intel’s fourth straight quarter of improved performance, driven largely by accelerating demand for compute power tied to AI workloads. Investors are beginning to believe again that INTC has a place in the future of high-performance computing. The road ahead remains competitive, but this quarter was another step in rebuilding credibility and showing that Intel’s turnaround isn’t just a story.

What are the Best mega-cap tech ASX Stocks to invest in right now?

Check our buy/sell tips

INTC Delivers Steady Growth with Strong Client Computing Segment and Foundry Expansion

INTC posted total revenue of USD 13.7 billion for the quarter, up 3% year-over-year, reflecting continued momentum in its turnaround story. The Client Computing Group, which remains Intel’s largest revenue driver, rose 5% from last year as the PC market showed early signs of recovery, supported by Windows 11 upgrades. Margins within this segment also improved, signalling healthier pricing dynamics and operational efficiency.

Interestingly, Intel’s Data Centre and AI division was relatively flat, down 1% for the quarter. This may suggest a moderation in hyperscaler capital expenditure or a short-term pause in AI infrastructure demand, at least from Intel’s perspective.

Meanwhile, Intel Foundry Services remains in heavy investment mode as the company ramps up domestic manufacturing capacity. Supported by substantial US government funding, production output for wafers exceeded expectations a positive sign for Intel’s long-term ambition to re-establish itself as a leading global foundry player.

INTC Returns to Profitability with 38% Gross Margin and Strong EPS Beat

While Intel’s topline growth was steady, the real story this quarter was profitability. Over the past year, gross margins have surged to 38%, up sharply from just 15% a year ago, while operating margins climbed to 5% from a loss in the prior period. On an earnings-per-share basis, Intel significantly beat expectations at USD 0.23.

The key drivers behind this margin recovery included lower restructuring costs, a 17–20% reduction in research and development spending, and a more profitable product mix skewed toward early AI-related offerings.

INTC Re-investing for Growth

Intel continued to tighten spending while redirecting capital toward high-priority growth areas. Research and development expenses came in at USD 3.2 billion, down 20% from the prior year, as the company sharpened its focus on AI and foundry technologies. Capital expenditure totalled USD 3 billion, primarily directed toward the expansion of Intel’s Arizona fabrication facilities.

What truly stands out this quarter, however, is the scale of external funding and partnerships supporting Intel’s transformation. The company received USD 8.9 billion in U.S. CHIPS Act incentives, including USD 5.7 billion directly allocated to Intel, alongside a new collaboration with NVIDIA to co-develop custom data centre and PC products. In addition, SoftBank’s USD 7 billion investment further strengthened INTC balance sheet. Together, these developments provide both financial flexibility and strategic backing as Intel accelerates its push into advanced manufacturing and AI-driven innovation.

The Investors’ Takeaway For INTC

We believe INTC is finally growing into its turnaround story. For years, the company was in repair mode, battling low wafer yields and inconsistent execution, but it now appears to be transitioning into a genuine growth phase. While revenue growth remains moderate, management’s focus on profitability has allowed operating margins to improve and free cash flow to strengthen.

Looking ahead, the key areas to watch are the performance of INTC Data Centre and AI segment, as well as progress at the new Arizona foundry. Historically, wafer yields have been a weak spot for INTC, so evidence of smoother production and improved efficiency at these facilities will be critical in confirming that this turnaround is sustainable.