Intel posted stronger profits than anyone had anticipated for the fiscal period ending in September. The stock price of the computer chip company rose by 7 percent when news of the profits was released. The new chief at the company, Lip-Bu Tan, has been reducing expenses aggressively, and efforts are paying off now.
This is the first time Intel reported since receiving enormous sums of money from a number of large investors. Nvidia committed to investing $5 billion, Japan’s SoftBank contributed $2 billion, and the US government purchased a 10 percent stake for $8.9 billion.
Intel already got the SoftBank funds but hasn’t yet received the Nvidia cash, said Dave Zinsner, who manages Intel’s money. The investments are a lifeline for the struggling company, which has been having trouble keeping pace with rivals.
Stock Price Recovers After Bad Year
Intel had a horrible year last year. The stock value fell around 60 percent due to the severe issues the company was experiencing. Things have been quite different this year, however. Intel stock has increased almost 90 percent through 2025 due to the fresh investments. That has caused Intel stock to perform better than Nvidia stock this year,.
Michael Schulman, managing investments at Running Point Capital, said stocks rose because the company demonstrated that it is gaining ground on costs and profit margins. The fresh funds from investors also puts people in better spirits about Intel’s future.
Strong Demand for Chips
Demand for Intel’s chips has been so high that the company cannot produce enough to fill all of the orders. Zinsner told them they are shipping short of demand currently, which he referred to as “a high-class problem.” Data center providers have found they must upgrade their chips in order to keep up with advances in technology, particularly for executing intelligent programs.
But Intel continues to struggle with producing its newest chips. Zinsner explained that the company’s process for fabricating its 18A technology is not currently functioning sufficiently. He projects that it will not get to an acceptable level until 2027.
Big Changes Under New Boss
The new CEO Tan has made radical changes since he took over. He has reduced expenses drastically and shed pieces of the business. Intel will have over 20 percent fewer employees by the end of this year compared to last year.
The former chief, Pat Gelsinger, had grand ambitions to transform Intel into a leading chip manufacturer for others to compete with Taiwan’s TSMC. But they were costly and resulted in Intel posting its first annual loss since 1986 in the previous year. Tan has reined in those ambitious schemes and set about correcting Intel’s core business.
In the September quarter, Intel registered an adjusted profit of 23 cents per share. Analysts had forecasted only 1 cent per share, and hence Intel comfortably exceeded expectations. Intel expects revenue of $12.8 billion to $13.8 billion for the next quarter, which is around what analysts had forecast.
FAQs
- Why did the stock price of Intel rise?
Intel posted far healthier profits than anticipated and was rewarded with billions in fresh investments from Nvidia, SoftBank and the US government.
- How much have investors invested in Intel recently?
Nvidia committed to invest $5 billion, SoftBank contributed $2 billion, and the US government took an $8.9 billion stake.
- Is Intel producing sufficient chips to keep up with demand?
No, Intel responded that demand is so high they can’t produce enough chips currently to fulfill all orders.
- What changes has the new CEO made?
Lip-Bu Tan has reduced expenses significantly, cut the workforce by more than 20 percent, and reined in costly manufacturing plans.
- When will Intel’s newest manufacturing technology be ready?
The company stated that its 18A manufacturing process will probably not be at acceptable quality levels until 2027.
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